Deck 37: Security Devices

Question 1

is/are items of personal property so securely attached to the land that they become a part of it.

A)Fixtures
B)Equipment
C)Inventory
D)Consumer goods

Answer 1

A

Question 2

A party who has primary liability is the creditor.

Answer 2

False

Question 3

A surety or guarantor may call on the creditor to proceed to compel the payment of the debt.

Answer 3

True

Question 4

Guarantors or sureties who have paid more than their proportionate share of the loss are entitled to from the coguarantors.

A)exoneration
B)subrogation
C)alteration
D)contribution

Question 5

A security agreement contains the terms of payment and names of the parties.

Question 6

Companies may purchase insurance against the risk of dishonest employees, often referred to as a . ​

A)coupon bond
B)registered bond
C)fidelity bond
D)principal bond

Question 7

Which of the following is a requirement of a security agreement?

A)It must be an unwritten agreement.
B)It must describe the collateral.
C)It must be signed by a seller.
D)It must contain the specific instrument of payment.

Question 8

Which of the following is true of a financing statement? ​

A)It is not signed by a debtor.
B)It can be substituted by a security agreement if it contains the appropriate information.
C)It does not describe the collateral.
D)It contains the mailing address of a guarantor.

Question 9

A party who undertakes to be responsible for another is a .

A)guarantor
B)creditor
C)principal
D)debtor

Question 10

Which of the following best describes the right to indemnity?

A)It is the right of a creditor to receive interest on the debt.
B)It is the right of a principal to receive compensation from the creditor.
C)It is the right of a guarantor to be reimbursed by the principal.
D)It is the right of a creditor to withhold payment in the case of a dispute.

Question 11

Most contracts of surety need not be in writing.

Question 12

​ Explain the right of subrogation of a surety.

Question 13

A security interest will attach automatically upon default by the debtor.

Question 14

When the rights of a seller to the collateral are inferior to those of third persons, the seller has a perfected security interest.

Question 15

A buyer has the right to transfer the collateral and require a determination of the amount owed.

Question 16

A material change in the terms of the contract discharges the surety from further liability.

Question 17

If a creditor damages collateral security given to secure a debt, surety is not discharged.

Question 18

A contract of suretyship is an agreement whereby one party promises to be responsible for the debt of another.

Question 19

A creditor may sell the collateral at any time the debtor is at risk of default.

Question 20

Discharge of a surety occurs:

A)if the creditor extends the time of the debt with the consent of the surety.
B)if the creditor continues to hold the collateral security of the debtor.
C)in case of any reduction in the rate of interest.
D)in the case of return of collateral security to the debtor.