Question 1

Which of the following is an interest in personal property or fixtures which secures payment or performance of an obligation?

Accepted Answer

A)   An approved interest.
B)   A secured interest.
C)   A secured transaction.
D)   A debt transaction.
E)   A security agreement.F) A) and C)
G) B) and D)

Question 2

Which of the following is true regarding priority in rights to the computer?

Accepted Answer

A)   The bank had priority because the computer was considered after-acquired property properly covered by the initial security interest.
B)   XYZ Electronics had priority because XYZ Electronics had a purchase-money security interest in the computer.
C)   XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 10 days of the purchase.
D)   XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 20 days of the purchase.
E)   The bank had a security interest in the computer because it perfected its security interest before XYZ Electronics did so.F) All of the above
G) B) and D)

Question 3

According to the UCC,which of the following should a financing statement list?

Accepted Answer

A)   The names and addresses of all parties involved only.
B)   Two items: (1)  the names and addresses of all the parties involved and (2)  a description of the collateral.
C)   Three items: (1)  the names and addresses of all the parties involved, (2)  a description of the collateral, and (3)  the signature of the debtor.
D)   Three items: (1)  the name of the financing bank, (2)  the name of the debtor, and (3)  a description of the collateral only.
E)   Three items: (1)  the name of the financing bank, (2)  the signature of the debtor, and (3)  a description of the collateral.F) A) and B)
G) C) and D)

Question 4

Under the UCC,a secured party's interest in proceeds lasts for ______ after the debtor receives the proceeds.

Accepted Answer

A)   30 Days
B)   60 Days
C)   1 Year
D)   5 Days
E)   10 DaysF) D) and E)
G) B) and C)

Question 5

What did the court conclude in the Case Opener,the case in which the plaintiff claimed that her repossessed vehicle was not sold in a commercially reasonably manner and that she was wrongly left with a deficiency?

Accepted Answer

A)   That showing that the sale grossed more than 50% of the vehicle's value established that the sale was commercially reasonable.
B)   That good faith in selling the vehicle as a matter of law established commercial reasonableness.
C)   That the secured party failed to prove that its sale of the vehicle conformed with established trade practices.
D)   That there was no obligation on the seller to engage in a commercially reasonable sale because the plaintiff was in default.
E)   That while not every aspect of the sale had to be commercially reasonable, the seller failed to show that sufficient advertisement of the sale was accomplished thereby rendering the sale itself commercially unreasonable.F) B) and D)
G) C) and D)

Question 6

Under the UCC,a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a term used to identify a person who routinely buys goods in good faith from a person who routinely sells these goods?

Accepted Answer

A)   A buyer in the typical course of business.
B)   An approved buyer.
C)   An approved buyer in the ordinary course of business.
D)   A buyer in the ordinary course of business.
E)   An exchanger in the typical course of business.F) A) and B)
G) A) and E)

Question 8

Which of the following is false regarding a creditor's rights to collateral upon a debtor's default?

Accepted Answer

A)   If a debtor defaults on a loan, the secured party can take possession of the collateral so long as the debtor does not breach the peace.
B)   Under the UCC, the secured party can sell, lease, or transfer the collateral in any commercially reasonable method.
C)   Regardless of where the collateral is sold, the secured party must strive to receive the best price for the collateral.
D)   Instead of disposing of the collateral, the secured party may choose to keep the collateral in full or partial satisfaction of the debt.
E)   A debtor in default has no rights in regard to whether collateral is retained by the secured party or sold.F) A) and D)
G) All of the above

Question 9

Which of the following is correct regarding the statement of Dennis that the security interest of ABC was not perfected?

Accepted Answer

A)   Dennis is wrong because the security interest perfected immediately.
B)   Dennis is correct because the security interest perfected when he was still in possession of the collateral 30 days after the purchase.
C)   Dennis is correct because the security interest perfected when he was still in possession of the collateral 60 days after the purchase.
D)   Dennis is correct because no financing statement was filed.
E)   Dennis is correct only because in the case of luxury goods, a financing statement must be filed within 20 days of the sale in order for the seller to establish perfection.F) B) and E)
G) B) and C)

Question 10

Generally,unsecured parties have priority over secured creditors.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is the agreement by which the debtor gives the secured interest to the secured party?

Accepted Answer

A)   Collateral agreement.
B)   Secured interest.
C)   Debtor agreement.
D)   Secured transaction.
E)   Security agreement.F) C) and D)
G) All of the above

Question 12

Which of the following is true regarding the definition of default under the UCC?

Accepted Answer

A)   The UCC defines default as failure to make any payment when due.
B)   The UCC defines default as failure to make a payment within 30 days after a payment is due.
C)   The UCC defines default as failure to make a payment within 60 days after a payment is due.
D)   The UCC defines default as failure to make a payment within 90 days after a payment is due.
E)   The UCC does not define default.F) A) and E)
G) A) and D)

Question 13

Which of the following is true regarding Tina's belief that her only option was to take possession of the collateral?

Accepted Answer

A)   Tina was correct regardless of whether a vehicle or another type of good was involved.
B)   Tina was correct, but only because a vehicle was involved.
C)   Tina was incorrect, because only when a vehicle is involved, a party must disregard the collateral and proceed to judgment.
D)   Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina only had the right to ignore the collateral and proceed to judgment.
E)   Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina had the right to either take possession of the collateral or ignore rights in the collateral and proceed to judgment.F) A) and D)
G) B) and D)

Question 14

Which of the following is true regarding the manner in which a secured party may sell collateral?

Accepted Answer

A)   The sale must be in a private sale only.
B)   The sale must be in a public sale only.
C)   The sale must be in an acknowledged sale.
D)   The sale may be in a private sale, public sale, or an acknowledged sale.
E)   The sale may be in either a private sale or a public sale.F) A) and B)
G) C) and D)

Question 15

Which of the following is the term for the type of agreement Dennis had with ABC Electronics?

Accepted Answer

A)   A pledged money interest.
B)   A collateralized interest.
C)   A purchase-money security interest.
D)   A security perfection interest.
E)   A cash deferred security interest.F) A) and C)
G) D) and E)

Question 16

A security interest may apply to personal property that is not yet in the debtor's possession.

Accepted Answer

A) True 
 B)False

Question 17

When a debtor sells collateral,he or she receives ____,something that is exchanged for collateral.

Accepted Answer

A)   After-acquired property
B)   Subsequent-acquired property
C)   Proceeds
D)   Collateral
E)   Post-financed fundsF) A) and D)
G) C) and E)

Question 18

Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles.

Accepted Answer

A) True 
 B)False

Question 19

What rights,if any,does a creditor who does not wish to repossess collateral have in the event of a default and why might a creditor prefer a remedy other than repossession of collateral?

Accepted Answer

Rather than repossessing collateral,a se...

Question 20

Which of the following is true regarding Tina's taking possession of Barry's convertible?

Accepted Answer

A)   Tina breached the peace because she did not provide Barry prior notification that she was going to repossess the vehicle.
B)   Tina breached the peace because she took the vehicle from a public lot.
C)   Tina breached the peace unless she can establish that Barry gave her prior permission to repossess the vehicle in a public lot.
D)   Tina did not breach the peace because she acted in a reasonable manner in taking the collateral.
E)   Tina did not breach the peace because Barry sustained no documented physical injury.F) B) and C)
G) A) and E)

Exam 30: Secured Transactions

A security interest may apply to personal property that is not yet in the debtor's possession.

Correct AnswerverifiedShow Answer

Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles.

Correct AnswerverifiedShow Answer

When a debtor sells collateral,he or she receives ____,something that is exchanged for collateral.

Correct AnswerverifiedShow Answer

Which of the following is an interest in personal property or fixtures which secures payment or performance of an obligation?

Correct AnswerverifiedShow Answer

Which of the following is a term used to identify a person who routinely buys goods in good faith from a person who routinely sells these goods?

Correct AnswerverifiedShow Answer

Which of the following is false regarding a creditor's rights to collateral upon a debtor's default?

Correct AnswerverifiedShow Answer

Which of the following is the agreement by which the debtor gives the secured interest to the secured party?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the definition of default under the UCC?

Correct AnswerverifiedShow Answer

What did the court conclude in the Case Opener,the case in which the plaintiff claimed that her repossessed vehicle was not sold in a commercially reasonably manner and that she was wrongly left with a deficiency?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the manner in which a secured party may sell collateral?

Correct AnswerverifiedShow Answer

Which of the following is the term for the type of agreement Dennis had with ABC Electronics?

Correct AnswerverifiedShow Answer

What rights,if any,does a creditor who does not wish to repossess collateral have in the event of a default and why might a creditor prefer a remedy other than repossession of collateral?

Correct AnswerverifiedRather than repossessing collateral,a se...View AnswerShow Answer

Generally,unsecured parties have priority over secured creditors.

Correct AnswerverifiedShow Answer

Which of the following is true regarding priority in rights to the computer?

Correct AnswerverifiedShow Answer

Which of the following is correct regarding the statement of Dennis that the security interest of ABC was not perfected?

Correct AnswerverifiedShow Answer

Under the UCC,a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Correct AnswerverifiedShow Answer

Which of the following is true regarding Tina's belief that her only option was to take possession of the collateral?

Correct AnswerverifiedShow Answer

According to the UCC,which of the following should a financing statement list?

Correct AnswerverifiedShow Answer

Which of the following is true regarding Tina's taking possession of Barry's convertible?

Correct AnswerverifiedShow Answer

Under the UCC,a secured party's interest in proceeds lasts for ______ after the debtor receives the proceeds.

Correct AnswerverifiedShow Answer

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Rather than repossessing collateral,a se...
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