Question 1

Any payment of the principal obligation by the debtor will discharge the surety or the guarantor from the obligation.

Accepted Answer

A) True 
 B)False

Question 2

A creditor can demand payment from the surety from the moment that the debt is due.

Accepted Answer

A) True 
 B)False

Question 3

Loan Company has a security interest against Manufacturing Inc. that is enforceable. In other words, with respect to the collateral, Loan's rights are

Accepted Answer

A)   attached.
B)   ensured.
C)   perfected.
D)   processed.E) A) and D)
F) A) and C)

Question 4

Greg borrows funds from Home Bank secured by Greg's car. Greg defaults on the debt. Home Bank's options include

Accepted Answer

A)   retaining the security interest and pursuing a judicial remedy.
B)   destroying the collateral and collecting the unpaid debt from Greg.
C)   having Greg put in debtor's prison until the debt is repaid.
D)   taking peaceful possession of the collateral and keeping it.E) B) and D)
F) A) and C)

Question 5

When a debtor defaults, a secured party who does not choose to retain the collateral must give it back to the debtor in exchange for cash.

Accepted Answer

A) True 
 B)False

Question 6

A guarantor has a right of reimbursement for any payments the guarantor made on the debt.

Accepted Answer

A) True 
 B)False

Question 7

An artisan's lien exists as long as the debtor maintains possession of the goods.

Accepted Answer

A) True 
 B)False

Question 8

Reese applies for a credit card at Sell-Mart. The application gives Sell-Mart a security interest in any goods that Reese buys with the card until she pays for them in full. In this situation, the secured party is

Accepted Answer

A)   Reese.
B)   Sell-Mart.
C)   the credit card.
D)   the goods that are bought with the credit card.E) A) and D)
F) B) and C)

Question 9

Consumer Credit, Inc. (CCI) , lends $1,000 to Dave. Eve acts as Dave's surety.  If Eve pays the loan, she gets

Accepted Answer

A)   any right that Dave had against CCI.
B)   any right that Dave or CCI had against her.
C)   any right that CCI had against Dave.
D)   none of the choices.E) A) and D)
F) C) and D)

Question 10

To create an enforceable security interest between Finance Corporation and Global Trade Inc. with a written security agreement, the agreement must contain a description of

Accepted Answer

A)   the debtor.
B)   the creditor.
C)   the surety.
D)   the collateral.E) C) and D)
F) A) and D)

Question 11

The method by which a secured party obtains a priority interest in a debtor's collateral is attachment.

Accepted Answer

A) True 
 B)False

Question 12

A third party who agrees to be primarily responsible for the debt of another is a guarantor.

Accepted Answer

A) True 
 B)False

Exam 32: Credit and Security

Greg borrows funds from Home Bank secured by Greg's car. Greg defaults on the debt. Home Bank's options include

Correct Answer
verified

Loan Company has a security interest against Manufacturing Inc. that is enforceable. In other words, with respect to the collateral, Loan's rights are

Correct Answer
verified

The method by which a secured party obtains a priority interest in a debtor's collateral is attachment.

Correct Answer
verified

A third party who agrees to be primarily responsible for the debt of another is a guarantor.

Correct Answer
verified

Any payment of the principal obligation by the debtor will discharge the surety or the guarantor from the obligation.

Correct Answer
verified

A creditor can demand payment from the surety from the moment that the debt is due.

Correct Answer
verified

To create an enforceable security interest between Finance Corporation and Global Trade Inc. with a written security agreement, the agreement must contain a description of

Correct Answer
verified

When a debtor defaults, a secured party who does not choose to retain the collateral must give it back to the debtor in exchange for cash.

Correct Answer
verified

An artisan's lien exists as long as the debtor maintains possession of the goods.

Correct Answer
verified

A guarantor has a right of reimbursement for any payments the guarantor made on the debt.

Correct Answer
verified

Reese applies for a credit card at Sell-Mart. The application gives Sell-Mart a security interest in any goods that Reese buys with the card until she pays for them in full. In this situation, the secured party is

Correct Answer
verified

Consumer Credit, Inc. (CCI) , lends $1,000 to Dave. Eve acts as Dave's surety. If Eve pays the loan, she gets

Correct Answer
verified

Exam 32: Credit and Security

Greg borrows funds from Home Bank secured by Greg's car. Greg defaults on the debt. Home Bank's options include

Correct AnswerverifiedShow Answer

Loan Company has a security interest against Manufacturing Inc. that is enforceable. In other words, with respect to the collateral, Loan's rights are

Correct AnswerverifiedShow Answer

The method by which a secured party obtains a priority interest in a debtor's collateral is attachment.

Correct AnswerverifiedShow Answer

A third party who agrees to be primarily responsible for the debt of another is a guarantor.

Correct AnswerverifiedShow Answer

Any payment of the principal obligation by the debtor will discharge the surety or the guarantor from the obligation.

Correct AnswerverifiedShow Answer

A creditor can demand payment from the surety from the moment that the debt is due.

Correct AnswerverifiedShow Answer

To create an enforceable security interest between Finance Corporation and Global Trade Inc. with a written security agreement, the agreement must contain a description of

Correct AnswerverifiedShow Answer

When a debtor defaults, a secured party who does not choose to retain the collateral must give it back to the debtor in exchange for cash.

Correct AnswerverifiedShow Answer

An artisan's lien exists as long as the debtor maintains possession of the goods.

Correct AnswerverifiedShow Answer

A guarantor has a right of reimbursement for any payments the guarantor made on the debt.

Correct AnswerverifiedShow Answer

Reese applies for a credit card at Sell-Mart. The application gives Sell-Mart a security interest in any goods that Reese buys with the card until she pays for them in full. In this situation, the secured party is

Correct AnswerverifiedShow Answer

Consumer Credit, Inc. (CCI) , lends $1,000 to Dave. Eve acts as Dave's surety. If Eve pays the loan, she gets

Correct AnswerverifiedShow Answer

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verified

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