Question 1

Under Revised Article 9 of the UCC,electronic chattel paper may be used as collateral in a secured transaction.

Accepted Answer

A) True 
 B)False

Question 2

First Federal loaned Madeline $20,000 to purchase a new van.The van was for Madeline's personal and family use.First Federal's security interest is a purchase money security interest which perfects only upon filing a financing statement.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is an example of a purchase money security interest in consumer goods?

Accepted Answer

A) A doctor purchasing a computer on credit to create a Webpage to make services and information available to her patients. 
B) A doctor purchasing on credit a blood glucose monitor to check his own blood sugar levels. 
C) A doctor purchasing a TV/VCR unit on credit to place in her office waiting room. 
D) A doctor purchasing an exercise bike for his employees to use over the lunch hour.

Question 4

Great State Bank loans money to Seth,securing the loan with property owned by Seth.Great State Bank is advised by its attorney to file a financing statement.Great State Bank doesn't understand why it should spend the extra money for this filing,since Seth has told them that he has no other creditors.Why should Great State Bank file a financing statement?

Accepted Answer

A) There are criminal penalties for failing to file. 
B) The financing statement allows Great State Bank to repossess the collateral on default without a court order. 
C) The financing statement will protect Great State's priority rights with other creditors by giving notice to other creditors that it claims a security interest in the collateral. 
D) Filing the financing statement is necessary to complete the attachment requirement in order to create a security interest.

Question 5

Byron bought a 50' yacht from Myrtle's Marina by entering into a note and security agreement promising the yacht as collateral for the purchase money security interest.When Byron faced some tough financial times,he failed to make three monthly payments.Myrtle's Marina repossessed the yacht by removing the yacht engine and advertised a public auction of the yacht.Byron appealed to his good friend Charles and managed to pay off the debt balance and the Marina's expenses of repossessing and advertising the sale.Byron's actions represent:

Accepted Answer

A) strict foreclosure. 
B) redemption. 
C) silent bidding at the auction. 
D) an artisan's lien.

Question 6

Gateway sold a big-screen TV and entertainment center to Iris for $2000 on credit.Iris signed a promissory note and gave Gateway a security interest in the TV and entertainment center.Gateway filed a financing statement in the appropriate public office.When Iris defaulted on her monthly payments owing a balance of $1780,Gateway's attorney made arrangements to have the TV and entertainment center repossessed.The attorney then placed classified ads in the local newspaper to sell the goods.The attorney's fees are $300,the repo company charged $150,and the advertising costs are $50.
(A)If Iris chooses to redeem the property,how much must she pay to Gateway to recover the property?
(B)If Iris does not redeem and the TV and entertainment center are sold for $1750,how will the money be disbursed?

Accepted Answer

The answer of Gateway sold a big-screen TV and entertainment...

Exam 23: Secured Transactions

Under Revised Article 9 of the UCC,electronic chattel paper may be used as collateral in a secured transaction.

First Federal loaned Madeline $20,000 to purchase a new van.The van was for Madeline's personal and family use.First Federal's security interest is a purchase money security interest which perfects only upon filing a financing statement.

Which of the following is an example of a purchase money security interest in consumer goods?