Question 1

A continuation statement can be filed:

Accepted Answer

A)   a month after the expiration date.
B)   within ten months before the expiration date.
C)   within three months after the expiration date.
D)   within six months before the expiration date.E) A) and C)
F) C) and D)

Question 2

If no expiry date is stated in the financing statement,it is valid for six months.

Accepted Answer

A) True 
 B)False

Question 3

Article 9 of the Uniform Commercial Code does not include general intangibles,such as copyrights and software,in its definition of personal property.

Accepted Answer

A) True 
 B)False

Question 4

The conflicting interest of an owner of the real property has priority over a perfected security interest in fixtures if the security interest is a purchase money security interest.

Accepted Answer

A) True 
 B)False

Question 5

An appliance store sells a television set to Adam for $750 on a conditional sales contract,reserving a security interest in the set until Adam has paid for it.The store does not file a financing statement but relies on attachment for perfection.Adam later borrows money from a credit union and gives it a security interest in the television set neither of them perfected the security interest.Adam defaults on his loans and the credit union tries to claim the set.Under these circumstances,_____.

Accepted Answer

A)   the credit union has a better claim to the set than does the appliance store
B)   the appliance store cannot claim the set as they relied on attachment for perfection
C)   the appliance store has a better claim to the set than the credit union
D)   neither the appliance store nor the credit union can claim the setE) A) and C)
F) B) and C)

Question 6

Denis bought a diamond ring on credit from Pavel as an engagement present for his fiancée.He signed a purchase money security agreement giving Pavel a security interest in the ring until it was paid for.Pavel did not file a financing statement covering its security interest.Denis filed for bankruptcy.The bankruptcy trustee claimed that the diamond ring was part of the bankruptcy estate because Pavel did not perfect his security interest.Pavel claimed that it had a perfected security interest in the ring.Did Pavel have to file a financing statement to perfect its security interest in the diamond ring?

Accepted Answer

No.Pavel had a perfected security intere...

Question 7

Which of the following is true of perfecting security interests?

Accepted Answer

A)   A continuation statement may be filed within a year before the five-year expiration date.
B)   A financing statement is effective for a period of one year from the date of filing.
C)   Filing a financing statement in the appropriate public office is one of the least used ways of perfecting a security interest.
D)   Possession, a possible way of perfecting a security interest in inventory, is sometimes achieved through a field warehousing arrangement.E) All of the above
F) A) and B)

Question 8

A conditional sales contract is an example of a(n) :

Accepted Answer

A)   chattel paper.
B)   document of title.
C)   negotiable instrument.
D)   investment property.E) B) and C)
F) None of the above

Question 9

To be sufficient,a financial statement must:

Accepted Answer

A)   indicate that the creditor is in possession of the collateral.
B)   be effective for a period of two years from the date of filing.
C)   be filed only in the state of the debtor's residence.
D)   indicate the collateral covered by the financing statement.E) C) and D)
F) None of the above

Question 10

A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:

Accepted Answer

A)   purchase money security interest is perfected three months after the debtor receives possession of the inventory.
B)   purchase money secured party gives an oral notification to the prior secured creditor before the debtor receives the inventory.
C)   holder of the competing security interest received notification within eight years before the debtor receives the inventory.
D)   notification states that the person expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory.E) A) and B)
F) B) and C)

Question 11

Explain how a security interest is created.

Accepted Answer

Obtaining a security interest enforceabl...

Question 12

Define future advances and explain how covering future advances in the security agreement benefits the creditor.

Accepted Answer

A security agreement may cover extension...

Question 13

Milt borrowed $200 from Femi.He agreed verbally that Femi could take possession of his books and keep them until he had repaid the loan in full.The next day,after Femi had the books in her possession,Orin offered to purchase the books from Milt for $150.Milt accepted the offer and took Orin's money to retrieve the books from Femi.Femi,however,refused to give up possession of the books until she was paid in full.Both Milt and Orin now claim that Femi has no rights to the books because she does not have a signed security agreement and has not filed a financing statement.In this case,which of the following statements is true according to the Uniform Commercial Code?

Accepted Answer

A)   Femi's security interest in the collection will protected only if she files a financing statement.
B)   Femi's security interest is not attached in the absence of a written security agreement even though she maintained possession of the books.
C)   Femi's possession of the collection satisfies the perfection requirement because it puts a third party like Orin on notice of Femi's interest in the property.
D)   Femi's failure to file a public notice rejects the perfection of the agreement even though she is in possession of the collateral.E) B) and C)
F) A) and B)

Question 14

When the security interest is perfected and the buyer knows of its existence,a buyer in the ordinary course of business:

Accepted Answer

A)   is subject to the security interest created by his seller.
B)   takes the purchase free from a security interest created by his seller.
C)   takes the purchase free from a security interest only if the person is buying farm products from a person engaged in a farming operation.
D)   is not protected if the dealership is in default of its loan agreement.E) A) and B)
F) All of the above

Question 15

Documents of title include:

Accepted Answer

A)   stock and bonds.
B)   dock warrants and dock receipts.
C)   certificates of deposit.
D)   conditional sales contracts.E) None of the above
F) All of the above

Question 16

The attachment of a security interest to collateral automatically gives the secured party a security interest in the proceeds on the disposal of the collateral by the debtor.

Accepted Answer

A) True 
 B)False  True

Question 17

The law covering security interests in personal property is contained in _____ of the Uniform Commercial Code.

Accepted Answer

A)   Article 6
B)   Article 4
C)   Article 3
D)   Article 9E) All of the above
F) C) and D)

Question 18

A security interest is not legally enforceable against a debtor until it is attached to a particular item or items of the debtor's property.

Accepted Answer

A) True 
 B)False

Question 19

An interest in fixtures that a creditor obtains to secure performance of an obligation is called a(n) :

Accepted Answer

A)   ownership equity.
B)   financial leverage.
C)   security interest.
D)   income trust.E) C) and D)
F) B) and D) C

Question 20

Instruments are goods that will be so affixed to real property that they are considered a part of the real property.

Accepted Answer

A) True 
 B)False  False

Exam 43: Security Interests in Personal Property

A continuation statement can be filed:

Correct Answer
verified

If no expiry date is stated in the financing statement,it is valid for six months.

Correct Answer
verified

Article 9 of the Uniform Commercial Code does not include general intangibles,such as copyrights and software,in its definition of personal property.

Correct Answer
verified

The conflicting interest of an owner of the real property has priority over a perfected security interest in fixtures if the security interest is a purchase money security interest.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
No.Pavel had a perfected security intere...
View Answer

Which of the following is true of perfecting security interests?

Correct Answer
verified

A conditional sales contract is an example of a(n) :

Correct Answer
verified

To be sufficient,a financial statement must:

Correct Answer
verified

A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:

Correct Answer
verified

Explain how a security interest is created.

Correct Answer
verified
Obtaining a security interest enforceabl...
View Answer

Define future advances and explain how covering future advances in the security agreement benefits the creditor.

Correct Answer
verified
A security agreement may cover extension...
View Answer

Correct Answer
verified

When the security interest is perfected and the buyer knows of its existence,a buyer in the ordinary course of business:

Correct Answer
verified

Documents of title include:

Correct Answer
verified

The attachment of a security interest to collateral automatically gives the secured party a security interest in the proceeds on the disposal of the collateral by the debtor.

Correct Answer
verified
True

The law covering security interests in personal property is contained in _____ of the Uniform Commercial Code.

Correct Answer
verified

A security interest is not legally enforceable against a debtor until it is attached to a particular item or items of the debtor's property.

Correct Answer
verified

An interest in fixtures that a creditor obtains to secure performance of an obligation is called a(n) :

Correct Answer
verified
C

Instruments are goods that will be so affixed to real property that they are considered a part of the real property.

Correct Answer
verified
False

Exam 43: Security Interests in Personal Property

A continuation statement can be filed:

Correct AnswerverifiedShow Answer

If no expiry date is stated in the financing statement,it is valid for six months.

Correct AnswerverifiedShow Answer

Article 9 of the Uniform Commercial Code does not include general intangibles,such as copyrights and software,in its definition of personal property.

Correct AnswerverifiedShow Answer

The conflicting interest of an owner of the real property has priority over a perfected security interest in fixtures if the security interest is a purchase money security interest.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo.Pavel had a perfected security intere...View AnswerShow Answer

Which of the following is true of perfecting security interests?

Correct AnswerverifiedShow Answer

A conditional sales contract is an example of a(n) :

Correct AnswerverifiedShow Answer

To be sufficient,a financial statement must:

Correct AnswerverifiedShow Answer

A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:

Correct AnswerverifiedShow Answer

Explain how a security interest is created.

Correct AnswerverifiedObtaining a security interest enforceabl...View AnswerShow Answer

Define future advances and explain how covering future advances in the security agreement benefits the creditor.

Correct AnswerverifiedA security agreement may cover extension...View AnswerShow Answer

Correct AnswerverifiedShow Answer

When the security interest is perfected and the buyer knows of its existence,a buyer in the ordinary course of business:

Correct AnswerverifiedShow Answer

Documents of title include:

Correct AnswerverifiedShow Answer

The attachment of a security interest to collateral automatically gives the secured party a security interest in the proceeds on the disposal of the collateral by the debtor.

Correct AnswerverifiedTrue

The law covering security interests in personal property is contained in _____ of the Uniform Commercial Code.

Correct AnswerverifiedShow Answer

A security interest is not legally enforceable against a debtor until it is attached to a particular item or items of the debtor's property.

Correct AnswerverifiedShow Answer

An interest in fixtures that a creditor obtains to secure performance of an obligation is called a(n) :

Correct AnswerverifiedC

Instruments are goods that will be so affixed to real property that they are considered a part of the real property.

Correct AnswerverifiedFalse

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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No.Pavel had a perfected security intere...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Obtaining a security interest enforceabl...
View Answer

Correct Answer
verified
A security agreement may cover extension...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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False