Question 1

Several documents may be considered together to comprise a security agreement.

Accepted Answer

A) True 
 B)False

Question 2

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

Accepted Answer

A) True 
 B)False

Question 3

The payment of Cathy's debt to Debt Collector LLC is guaranteed by Cathy's personal property. Debt Collector is most likely to perfect its interest by

Accepted Answer

A)   insuring the property for the full amount of its value.
B)   calculating the precise amount of the debt.
C)   correcting grammatical errors in the parties' written agreement.
D)   filing a financing statement with the appropriate authority.E) A) and B)
F) All of the above

Question 4

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Accepted Answer

A)   obtaining a deficiency judgment.
B)   agreeing to a floating lien.
C)   exercising the right of redemption.
D)   requesting a commercially reasonable sale.E) C) and D)
F) B) and D)

Question 5

A security agreement must describe the collateral because no security interest can exist unless the parties agree on the property subject to it.

Accepted Answer

A) True 
 B)False

Question 6

A floating lien is a security interest retained in collateral even when the collateral changes in character, classification, or location.

Accepted Answer

A) True 
 B)False

Question 7

A party who owes payment or performance of a secured obligation is a secured party.

Accepted Answer

A) True 
 B)False

Question 8

A security interest can cover only property in which the debtor has present rights.

Accepted Answer

A) True 
 B)False

Question 9

Mobile Talk LLC sells phones. The phones are the collateral for a loan from Noble Bank to the seller. The parties agree to extend the UCC's automatic-perfection period for proceeds. In regard to the bank's interest in the proceeds, this agreement

Accepted Answer

A)   permits the interest to remain perfected.
B)   extinguishes the interest after the automatic-perfection period.
C)   effectively relinquishes the bank's interest.
D)   has no effect on the bank's interest.E) None of the above
F) All of the above

Question 10

The UCC does not define the term default. This encourages the parties to a secured transaction to

Accepted Answer

A)   include standards that align with the concept of unconscionability.
B)   run counter to the UCC's provision regarding good faith.
C)   stipulate the conditions that will constitute a default.
D)   provide the creditor with the maximum protection possible.E) A) and C)
F) None of the above

Question 11

Owen is given value by Payday Sales Company in the form of a commitment to sell goods on credit. In terms of creating an enforceable security interest, this is

Accepted Answer

A)   the only requirement.
B)   a factor but not a requirement.
C)   irrelevant.
D)   one of the requirements.E) C) and D)
F) B) and D)

Question 12

Bayside Marina borrows funds from Credit Union secured by Bayside's interest in the marina. If Credit Union fails to perfect its claim to the collateral, the claim will be reduced to that of

Accepted Answer

A)   an unsecured creditor.
B)   a state of local official.
C)   a secured party.
D)   a debtor.E) A) and D)
F) B) and D)

Exam 25: Security Interests and Creditors Rights

Owen is given value by Payday Sales Company in the form of a commitment to sell goods on credit. In terms of creating an enforceable security interest, this is

Correct Answer
verified

The payment of Cathy's debt to Debt Collector LLC is guaranteed by Cathy's personal property. Debt Collector is most likely to perfect its interest by

Correct Answer
verified

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Correct Answer
verified

Mobile Talk LLC sells phones. The phones are the collateral for a loan from Noble Bank to the seller. The parties agree to extend the UCC's automatic-perfection period for proceeds. In regard to the bank's interest in the proceeds, this agreement

Correct Answer
verified

The UCC does not define the term default. This encourages the parties to a secured transaction to

Correct Answer
verified

A security interest can cover only property in which the debtor has present rights.

Correct Answer
verified

A security agreement must describe the collateral because no security interest can exist unless the parties agree on the property subject to it.

Correct Answer
verified

Bayside Marina borrows funds from Credit Union secured by Bayside's interest in the marina. If Credit Union fails to perfect its claim to the collateral, the claim will be reduced to that of

Correct Answer
verified

Several documents may be considered together to comprise a security agreement.

Correct Answer
verified

A floating lien is a security interest retained in collateral even when the collateral changes in character, classification, or location.

Correct Answer
verified

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

Correct Answer
verified

A party who owes payment or performance of a secured obligation is a secured party.

Correct Answer
verified

Exam 25: Security Interests and Creditors Rights

Owen is given value by Payday Sales Company in the form of a commitment to sell goods on credit. In terms of creating an enforceable security interest, this is

Correct AnswerverifiedShow Answer

The payment of Cathy's debt to Debt Collector LLC is guaranteed by Cathy's personal property. Debt Collector is most likely to perfect its interest by

Correct AnswerverifiedShow Answer

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by

Correct AnswerverifiedShow Answer

Mobile Talk LLC sells phones. The phones are the collateral for a loan from Noble Bank to the seller. The parties agree to extend the UCC's automatic-perfection period for proceeds. In regard to the bank's interest in the proceeds, this agreement

Correct AnswerverifiedShow Answer

The UCC does not define the term default. This encourages the parties to a secured transaction to

Correct AnswerverifiedShow Answer

A security interest can cover only property in which the debtor has present rights.

Correct AnswerverifiedShow Answer

A security agreement must describe the collateral because no security interest can exist unless the parties agree on the property subject to it.

Correct AnswerverifiedShow Answer

Bayside Marina borrows funds from Credit Union secured by Bayside's interest in the marina. If Credit Union fails to perfect its claim to the collateral, the claim will be reduced to that of

Correct AnswerverifiedShow Answer

Several documents may be considered together to comprise a security agreement.

Correct AnswerverifiedShow Answer

A floating lien is a security interest retained in collateral even when the collateral changes in character, classification, or location.

Correct AnswerverifiedShow Answer

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

Correct AnswerverifiedShow Answer

A party who owes payment or performance of a secured obligation is a secured party.

Correct AnswerverifiedShow Answer

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