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Exam 20: Security Interests in Personal Property

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Question 31

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The last security interest to be perfected is the first in priority over any other perfected security interests.

A) True
B) False

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Question 32

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Filing a financing statement with the appropriate public office is the only way to perfect a purchase-money security interest in consumer goods.

A) True
B) False

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Question 33

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A security interest that provides for a security interest in proceeds is a floating lien.

The payment of Hu's debt to Ian is guaranteed by Hu's personal property.To give public notice of his interest in Hu's property,Ian is most likely to

Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company.Perfection of this security interest may not protect Quotient Financial against the claim of

The concept of a floating lien does not apply to a shifting stock of goods.

A security interest is not enforceable after the creditor's rights have attached to the collateral.

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt.

County Bank wants to perfect its security interest in collateral owned by Direct Sales Company.Most likely,a financing statement should be filed with

The payment of Eden's debt to Flem is guaranteed by Eden's personal property.This property is

The first security interest to be perfected is the last in priority over any other perfected security interests.

A security interest is enforceable only if the collateral is in the secured party's possession.

A continuation statement is effective only if it is filed within six months before the expiration of a financing statement.

Fact Pattern 20-1 (Questions 14-16 apply) Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto Sales. Fine sells the cars to consumers and businesses. -Refer to Fact Pattern 20-1.A car in Fine's possession is probably

Expert Capital Company and Frugal Financial Bank are secured parties with security interests in property owned by Grande Corporation.Between these security interests,the first to be filed or perfected has priority over other filed or perfected security interests in

A description of collateral as "all the debtor's assets" is too general to reasonably identify the subject of a security agreement.

On default,unless the security agreement states otherwise,the secured party has the right to repossess collateral.

A financing statement is effective only if it is filed electronically.

Fact Pattern 20-2 General Leasing Company (GLC) buys equipment for use as inventory, borrow¬ing $1 million from Helpful Finance Corporation for a security in¬terest in the equipment. The next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the equipment. GLC defaults on the loans. -Refer to Fact Pattern 20-2.Suppose that Helpful perfects its security interest when GLC takes possession of the equipment.In that circumstance,the party with priority to the collateral on GLC's default would be

To qualify as a commercially reasonable sale,a secured party's sale of collateral,after default and repossession,must be public.