Question 1

Everyday Loans,Inc.,takes possession of Ferbie's stock in Glade Electronics Corporation to perfect Everyday's security interest in the stock.This is

Accepted Answer

A) after-acquired property. 
B) a pledge. 
C) a purchase-money security interest. 
D) proceeds.

Question 2

The payment of Brian's debt to Chuck is guaranteed by Brian's personal property.This is

Accepted Answer

A) a reorganization. 
B) a secured transaction. 
C) a suretyship agreement. 
D) a violation of most state laws.

Question 3

A security interest is not enforceable after the creditor's rights have attached to the collateral.

Accepted Answer

A) True 
 B)False

Question 4

Expert Capital Company and Frugal Financial Bank are secured parties with security interests in property owned by Grande Corporation.Between these security interests,the first to be filed or perfected has priority over other filed or perfected security interests in

Accepted Answer

A) most circumstances. 
B) no circumstances. 
C) states that have not adopted Article 9 of the UCC. 
D) states that require a security agreement to be signed and dated by the creditor.

Question 5

The payment of John's debt to Kirsten is guaranteed by John's personal property.Kirsten is most likely to perfect her interest by

Accepted Answer

A) attaching a bright label to John's property. 
B) calculating the precise amount of John's debt. 
C) correcting grammatical errors in the parties' written agreement. 
D) filing a financing statement with the appropriate authority.

Question 6

Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses.
-Refer to Fact Pattern 24-1.Holly,a professional driver,buys an Excel from Fine to drive in a Grand Prix race.Holly's Excel is

Accepted Answer

A) a consumer good. 
B) an accession. 
C) equipment. 
D) inventory.

Question 7

A security interest cannot be perfected without the filing of a financing statement.

Accepted Answer

A) True 
 B)False

Question 8

Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.

Accepted Answer

A) True 
 B)False

Question 9

Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses.
-Refer to Fact Pattern 24-1.Ira,a police officer,buys an Excel from Fine to drive in his off-duty hours.Ira's Excel is

Accepted Answer

A) a consumer good. 
B) an accession. 
C) equipment. 
D) inventory.

Question 10

The payment of Mo's debt to Neil is guaranteed by Mo's personal property.This is

Accepted Answer

A) governed by Article 2 of the UCC. 
B) governed by Article 3 of the UCC. 
C) governed by Article 9 of the UCC. 
D) not governed by the UCC.

Question 11

The payment of Frida's debt to Gianini is guaranteed by Frida's personal property.Gianini is

Accepted Answer

A) a debtor. 
B) a secured party. 
C) a secured transaction. 
D) a security interest.

Question 12

A continuation statement is effective only if it is filed within six months before the expiration of a financing statement.

Accepted Answer

A) True 
 B)False

Question 13

Khalil holds a security interest in inventory owned by Luc.Khalil assigns his interest in the inventory to Mal.Mal becomes the secured party of record

Accepted Answer

A) automatically. 
B) if Khalil advises Luc of the assignment. 
C) if Mal advises Luc of the assignment. 
D) if Mal files a uniform amendment form.

Question 14

When two conflicting security interests are unperfected,the first to attach has priority.

Accepted Answer

A) True 
 B)False

Question 15

To be valid,a security agreement must contain a description of the collateral.

Accepted Answer

A) True 
 B)False

Question 16

Prime Property Investments,Inc.,files a financing statement to provide notice of its security interest in the property of Qwik Breakfast Restaurant.The initial effective term of a financing statement is a period of

Accepted Answer

A) five days. 
B) five months. 
C) five weeks. 
D) five years.

Question 17

A security interest that provides for a security interest in proceeds is a floating lien.

Accepted Answer

A) True 
 B)False

Question 18

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt.

Accepted Answer

A) True 
 B)False

Question 19

A financing statement is effective for no more than five months from the date of filing.

Accepted Answer

A) True 
 B)False

Question 20

An improper filing renders a secured party unperfected.

Accepted Answer

A) True 
 B)False

Exam 24: Security Interests in Personal Property

Everyday Loans,Inc.,takes possession of Ferbie's stock in Glade Electronics Corporation to perfect Everyday's security interest in the stock.This is

The payment of Brian's debt to Chuck is guaranteed by Brian's personal property.This is

A security interest is not enforceable after the creditor's rights have attached to the collateral.

Expert Capital Company and Frugal Financial Bank are secured parties with security interests in property owned by Grande Corporation.Between these security interests,the first to be filed or perfected has priority over other filed or perfected security interests in

The payment of John's debt to Kirsten is guaranteed by John's personal property.Kirsten is most likely to perfect her interest by

Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. -Refer to Fact Pattern 24-1.Holly,a professional driver,buys an Excel from Fine to drive in a Grand Prix race.Holly's Excel is

A security interest cannot be perfected without the filing of a financing statement.

Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.

Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. -Refer to Fact Pattern 24-1.Ira,a police officer,buys an Excel from Fine to drive in his off-duty hours.Ira's Excel is

The payment of Mo's debt to Neil is guaranteed by Mo's personal property.This is

The payment of Frida's debt to Gianini is guaranteed by Frida's personal property.Gianini is

A continuation statement is effective only if it is filed within six months before the expiration of a financing statement.

Khalil holds a security interest in inventory owned by Luc.Khalil assigns his interest in the inventory to Mal.Mal becomes the secured party of record

When two conflicting security interests are unperfected,the first to attach has priority.

To be valid,a security agreement must contain a description of the collateral.

Prime Property Investments,Inc.,files a financing statement to provide notice of its security interest in the property of Qwik Breakfast Restaurant.The initial effective term of a financing statement is a period of

A security interest that provides for a security interest in proceeds is a floating lien.

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt.

A financing statement is effective for no more than five months from the date of filing.

An improper filing renders a secured party unperfected.