Question

1). Which of the following is not included in a security agreement?

Select one:

a. Reference to the finance statement.

b. Reference to the loan.

c. Creation of the security interest.

d. Description of the collateral.

2)

A secured creditor's interest in after-acquired property might include

Select one:

a. new inventory to replace sold inventory.

b. equipment purchased after the initial loan is disbursed, but paid for with money from that loan.

c. Both constitute after-acquired property.

d. Neither, a creditor may not have an interest in after-acquired property. A

3)

Between two unperfected secured creditors,

Select one:

a. Both unperfected creditors become unsecured creditors.

b. the first to perfect has priority over the collateral.

c. the first to attach has priority over the collateral.

5).

Perfection

Select one:

a. gives notice to third parties (usually other creditors) that this creditor has a security interest in the collateral.

b. gives the creditor a priority interest in the collateral securing her loan.

c. accomplished both of these tasks.

6)

In which of the following situations can a security interest be perfected without filing a Finance Statement?

Select one:

a. Possession of the collateral.

b. Perfection by automatic attachment of consumer goods that are purchased on credit from the seller.

c. Both of these are ways to perfect without filing.

d. Neither of these are ways to perfect without filing. A creditor must always file a Finance Statement.

Answer 1

1 Option A

Filing an authorized financing statement is not necessary for a security interest to attach, but rather is one way to perfect a security interest. Attachment establishes the secured party's rights against the debtor. Perfection gives a secured party greater priority as against others with competing interests in the collateral. A security interest cannot be perfected until it has attached.

2.Option C

Any interest in personal property or fixtures that secures payment or performance of an obligation.

3.Option C

As between two unperfected secured creditors, the first to attach has priority.As between two perfected secured creditors, the first to file or perfect, whichever occurs first, has priority.

5.Option C

Perfection refers to the steps legally required to give the secured party an interest in the collateral that is effective as against the world. Perfection is not necessary to create a valid enforceable security interest between debtor but is necessary to have priority over third parties. Methods of perfection includes automatic perfection, possession, control and filing financing statement.

6. Option C

Two required conditions are when the collateral is transferred into possession of the secured party and when the security interest is one of a limited number under the UCC that can be perfected on attachement.