Question 1

Shen buys a bicycle on credit from Bike City. Bike City has a security agreement establishing a purchase-money security interest in the bicycle. Shen, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Mindy, who is unaware of Bike City's security interest in the bicycle. Shen fails to make payments on the bicycle and Bike City seeks to repossess it. Discuss the rights and obligations of the parties.

Accepted Answer

Under the UCC, as long as Mindy, the buy...

Question 2

[Overextended Debtor] Michael bought a flat screen television for his living room from ABC Electronics, and financed the purchase through ABC Electronics. Later, Michael bought a boat, a new car, and an expensive engagement ring for his girlfriend, and found he was unable to continue making payments on the television. The manager of ABC Electronics called 60 days after the sale and asked Michael to return the television. Michael refused on the basis that ABC Electronics never perfected its interest in the television. He also explained that he had later granted a secured interest in the television along with his other goods to XYZ Credit in return for a loan. No financing statement was filed on behalf of ABC Electronics although XYZ Credit, with no knowledge of any interest of ABC Electronics, did file a financing statement.
-What is the term for the type of agreement Michael 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) None of the above
G) A) and B)

Question 3

A description of the collateral does not need to be included in a security agreement.

Accepted Answer

A) True 
 B)False

Question 4

Veronica and Helen are discussing the definition of "goods" and have come up with the following list. Which of the following have they incorrectly classified as a good?

Accepted Answer

A)   Consumer goods.
B)   Farm products.
C)   Documents of title.
D)   Inventory.
E)   Equipment.F) C) and E)
G) A) and B)

Question 5

Value is consideration, according to the UCC.

Accepted Answer

A) True 
 B)False

Question 6

What are a secured party's remedies to recover its money when a debtor defaults on a loan?

Accepted Answer

The secured party can (1) take possessio...

Question 7

A person or party that has an obligation to the secured party is a ________.

Accepted Answer

A)   Creditor.
B)   Debtor.
C)   Secured creditor.
D)   Secured debtor.
E)   Transaction debtor.F) C) and D)
G) A) and B)

Question 8

What is the likely effect on perfection when a financing statement is filed under an incorrect name?

Accepted Answer

A)   Perfection is effective if the secured party's name is incorrect, but not if the debtor's name is incorrect.
B)   Perfection is effective if the debtor's name is incorrect, but not if the secured party's name is incorrect.
C)   Perfection is effective if the error involves the name of a corporation, but not if the error involves the name of an individual.
D)   The perfection is likely not effective.
E)   There is usually no effect on perfection.F) A) and C)
G) B) and E)

Question 9

________ is defined as the series of legal steps taken by a secured party to protect its rights in the collateral from other creditors who wish to have their debts satisfied through the same collateral.

Accepted Answer

A)   Perfection
B)   Filing
C)   Noticing
D)   Financing noticing
E)   ArrangementF) B) and D)
G) All of the above

Question 10

Anna runs a business in Oklahoma and purchases goods to stalk her store every month from her supplier Glenn in Michigan. Anna would be considered a(n)

Accepted Answer

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

Question 11

A secured transaction is a transaction in ________.

Accepted Answer

A)   which the payment of a debt is guaranteed by personal property owned by the debtor
B)   which the payment of a loan is made to a bank
C)   which a guarantor gives collateral for any transaction
D)   which a bank receives property as collateral
E)   which two parties agree to a loanF) B) and C)
G) A) and D)

Question 12

Which of the following is true regarding a security interest in consumer goods?

Accepted Answer

A)   A financing statement must be filed in order to perfect a security interest in consumer goods.
B)   Under federal consumer protection legislation, a seller may not hold a security interest in consumer goods.
C)   Under most state laws, a seller may not hold a security interest in consumer goods.
D)   When a creditor sells a consumer good to a debtor on a credit basis, the security interest perfects automatically.
E)   When a creditor sells a consumer good to a debtor on a credit basis, the security interest is perfected by the seller's possession.F) B) and C)
G) A) and C)

Question 13

Which of the following is true regarding the court's opinion in Price Auto Sales, Inc. v. Sanders, the case in the text in which a debtor sued an auto company for injuries sustained during an attempt to repossess his automobile?

Accepted Answer

A)   The court ruled that the debtor had no right to protest the repossession.
B)   The court ruled that repossession was not completed and that a breach of the peace occurred in the process of the repossession.
C)   The court ruled that, because repossession had been completed, there could be no breach of the peace as a matter of law.
D)   The court ruled that a debtor's protest does not affect whether or not repossession is complete, and it is not relevant to whether or not a breach of the peace occurred
E)   The court ruled that once repossession is complete, it is not relevant whether or not a breach of the peace occurred.F) A) and D)
G) A) and C)

Question 14

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

Accepted Answer

A)   A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state.
B)   A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state.
C)   A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state.
D)   A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state.
E)   A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state.F) C) and D)
G) B) and E)

Question 15

Regarding protection in movable collateral that is moved from one state to another, what does the UCC provide?

Accepted Answer

According to the UCC, a security interes...

Question 16

Set forth the steps that a creditor must take to become a secured party.

Accepted Answer

To become a secured party, the creditor ...

Question 17

Jo purchases a car from Used-Carz and signs a security agreement that identifies Jo's "blue car" as the collateral. If Jo is unable to make payments, how likely would Used-Carz be in a suit to recover the collateral if Jo defaults on her payments?

Accepted Answer

A)   Very likely because Jo's car is identified as collateral.
B)   Unlikely, because the collateral is not clearly described in the written agreement.
C)   Very likely, because, although the collateral is not clearly described in the written agreement, creditors cannot lose rights to collateral.
D)   Very likely, because collateral need not be identified in a security agreement.
E)   Unlikely, because Used-Carz must first attempt to repossess the car.F) A) and D)
G) B) and D)

Question 18

Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party?

Accepted Answer

A)   An ending statement.
B)   A termination statement.
C)   A bind-up statement.
D)   A release statement.
E)   A reversion statement.F) B) and E)
G) A) and D)

Question 19

Where should the bank have filed the financing statement?

Accepted Answer

A)   The state in which the hang glider is registered.
B)   Any state that accepts the UCC.
C)   The state in which the branch where Monte took out his loan is located.
D)   The state in which the bank is headquartered.
E)   The state in which Monte resides.F) B) and D)
G) A) and C)

Question 20

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Accepted Answer

A)   The security interest immediately terminates.
B)   The security interest passes to the new buyer.
C)   Regardless of whether the buyer is aware of the security interest, so long as the buyer purchases the good for his or her personal use, the security interest terminates if the sale to the new buyer is made before the original secured party files a financial statement.
D)   As long as the buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financing statement, the new buyer obtains the good free of the security interest.
E)   As long as the buyer is not aware of the security interest, purchases the good for personal use or resale, and purchases good before the secured party files a financial statement, the buyer obtains the good free of the security interest.F) All of the above
G) B) and E)

Exam 30: Secured Transactions

A description of the collateral does not need to be included in a security agreement.

Correct Answer
verified

Veronica and Helen are discussing the definition of "goods" and have come up with the following list. Which of the following have they incorrectly classified as a good?

Correct Answer
verified

Jo purchases a car from Used-Carz and signs a security agreement that identifies Jo's "blue car" as the collateral. If Jo is unable to make payments, how likely would Used-Carz be in a suit to recover the collateral if Jo defaults on her payments?

Correct Answer
verified

Anna runs a business in Oklahoma and purchases goods to stalk her store every month from her supplier Glenn in Michigan. Anna would be considered a(n)

Correct Answer
verified

Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party?

Correct Answer
verified

What are a secured party's remedies to recover its money when a debtor defaults on a loan?

Correct Answer
verified
The secured party can (1) take possessio...
View Answer

A person or party that has an obligation to the secured party is a ________.

Correct Answer
verified

Where should the bank have filed the financing statement?

Correct Answer
verified

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Correct Answer
verified

Value is consideration, according to the UCC.

Correct Answer
verified

Set forth the steps that a creditor must take to become a secured party.

Correct Answer
verified
To become a secured party, the creditor ...
View Answer

Regarding protection in movable collateral that is moved from one state to another, what does the UCC provide?

Correct Answer
verified
According to the UCC, a security interes...
View Answer

What is the likely effect on perfection when a financing statement is filed under an incorrect name?

Correct Answer
verified

Correct Answer
verified

A secured transaction is a transaction in ________.

Correct Answer
verified

Which of the following is true regarding a security interest in consumer goods?

Correct Answer
verified

________ is defined as the series of legal steps taken by a secured party to protect its rights in the collateral from other creditors who wish to have their debts satisfied through the same collateral.

Correct Answer
verified

Which of the following is true regarding the court's opinion in Price Auto Sales, Inc. v. Sanders, the case in the text in which a debtor sued an auto company for injuries sustained during an attempt to repossess his automobile?

Correct Answer
verified

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

Correct Answer
verified

Correct Answer
verified
Under the UCC, as long as Mindy, the buy...
View Answer

Exam 30: Secured Transactions

A description of the collateral does not need to be included in a security agreement.

Correct AnswerverifiedShow Answer

Veronica and Helen are discussing the definition of "goods" and have come up with the following list. Which of the following have they incorrectly classified as a good?

Correct AnswerverifiedShow Answer

Jo purchases a car from Used-Carz and signs a security agreement that identifies Jo's "blue car" as the collateral. If Jo is unable to make payments, how likely would Used-Carz be in a suit to recover the collateral if Jo defaults on her payments?

Correct AnswerverifiedShow Answer

Anna runs a business in Oklahoma and purchases goods to stalk her store every month from her supplier Glenn in Michigan. Anna would be considered a(n)

Correct AnswerverifiedShow Answer

Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party?

Correct AnswerverifiedShow Answer

What are a secured party's remedies to recover its money when a debtor defaults on a loan?

Correct AnswerverifiedThe secured party can (1) take possessio...View AnswerShow Answer

A person or party that has an obligation to the secured party is a ________.

Correct AnswerverifiedShow Answer

Where should the bank have filed the financing statement?

Correct AnswerverifiedShow Answer

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Correct AnswerverifiedShow Answer

Value is consideration, according to the UCC.

Correct AnswerverifiedShow Answer

Set forth the steps that a creditor must take to become a secured party.

Correct AnswerverifiedTo become a secured party, the creditor ...View AnswerShow Answer

Regarding protection in movable collateral that is moved from one state to another, what does the UCC provide?

Correct AnswerverifiedAccording to the UCC, a security interes...View AnswerShow Answer

What is the likely effect on perfection when a financing statement is filed under an incorrect name?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A secured transaction is a transaction in ________.

Correct AnswerverifiedShow Answer

Which of the following is true regarding a security interest in consumer goods?

Correct AnswerverifiedShow Answer

________ is defined as the series of legal steps taken by a secured party to protect its rights in the collateral from other creditors who wish to have their debts satisfied through the same collateral.

Correct AnswerverifiedShow Answer

Which of the following is true regarding the court's opinion in Price Auto Sales, Inc. v. Sanders, the case in the text in which a debtor sued an auto company for injuries sustained during an attempt to repossess his automobile?

Correct AnswerverifiedShow Answer

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedUnder the UCC, as long as Mindy, the buy...View AnswerShow Answer

Correct Answer
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The secured party can (1) take possessio...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
To become a secured party, the creditor ...
View Answer

Correct Answer
verified
According to the UCC, a security interes...
View Answer

Correct Answer
verified

Correct Answer
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Under the UCC, as long as Mindy, the buy...
View Answer