Question 1

is/are items of personal property so securely attached to the land that they become a part of it.&#10;A)Fixtures&#10;B)Equipment&#10;C)Inventory&#10;D)Consumer goods

Accepted Answer

Fixtures are items of personal property that are so securely attached to the land or a building that they are considered legally part of the real property. This can include items like lighting fixtures or a built-in bookcase.

Question 2

A party who has primary liability is the creditor.

Accepted Answer

A party with primary liability is the one responsible for fulfilling the obligation of a financial instrument or contract, such as the borrower in a loan agreement, not the creditor who is the party to whom the debt is owed.

Question 3

A surety or guarantor may call on the creditor to proceed to compel the payment of the debt.

Accepted Answer

A surety or guarantor has the right to call upon the creditor to proceed against the principal debtor to compel payment of the debt, especially when the surety feels at risk of having to pay the debt themselves. This is known as the right of exoneration.

Question 4

Guarantors or sureties who have paid more than their proportionate share of the loss are entitled to from the coguarantors.&#10;A)exoneration&#10;B)subrogation&#10;C)alteration&#10;D)contribution

Accepted Answer

Guarantors or sureties who have paid more than their share are entitled to seek contribution from their coguarantors, which means they can demand the others pay their fair share of the obligation.

Question 5

A security agreement contains the terms of payment and names of the parties.

Accepted Answer

A security agreement is a legal document that outlines the terms of a loan, including the amount of the loan, the interest rate, the repayment schedule, and the collateral that secures the loan. The security agreement also names the parties to the loan, the borrower and the lender.

Question 6

Companies may purchase insurance against the risk of dishonest employees, often referred to as a . &#8203;&#10;A)coupon bond&#10;B)registered bond&#10;C)fidelity bond&#10;D)principal bond

Accepted Answer

Fidelity bonds are insurance policies purchased by companies to protect against losses caused by the fraudulent acts of their employees.

Question 7

Which of the following is a requirement of a security agreement?&#10;A)It must be an unwritten agreement.&#10;B)It must describe the collateral.&#10;C)It must be signed by a seller.&#10;D)It must contain the specific instrument of payment.

Accepted Answer

A security agreement must describe the collateral to ensure that the terms of the agreement are clear and enforceable. This description helps in identifying the specific assets that are being used as security for the loan or obligation.

Question 8

Which of the following is true of a financing statement? &#8203;&#10;A)It is not signed by a debtor.&#10;B)It can be substituted by a security agreement if it contains the appropriate information.&#10;C)It does not describe the collateral.&#10;D)It contains the mailing address of a guarantor.

Accepted Answer

A financing statement can indeed be substituted by a security agreement if the latter contains all the necessary information that a financing statement requires, such as the names of the debtor and secured party, and a description of the collateral. This is a provision under Article 9 of the Uniform Commercial Code (UCC) in the United States.

Question 9

A party who undertakes to be responsible for another is a .&#10;A)guarantor&#10;B)creditor&#10;C)principal&#10;D)debtor

Accepted Answer

A guarantor is someone who agrees to be responsible for another's debt or obligations if the latter fails to fulfill them.

Question 10

Which of the following best describes the right to indemnity?&#10;A)It is the right of a creditor to receive interest on the debt.&#10;B)It is the right of a principal to receive compensation from the creditor.&#10;C)It is the right of a guarantor to be reimbursed by the principal.&#10;D)It is the right of a creditor to withhold payment in the case of a dispute.

Accepted Answer

The right to indemnity refers to the right of a guarantor (or someone who has fulfilled another's obligation) to be reimbursed by the principal debtor or the party primarily responsible for the obligation. This ensures that the guarantor, who steps in to fulfill the obligation on behalf of the principal, is not unfairly burdened by the cost.

Question 11

Most contracts of surety need not be in writing.

Accepted Answer

The answer of Most contracts of surety need not be...

Question 12

&#8203; Explain the right of subrogation of a surety.

Accepted Answer

The answer of &#8203; Explain the right of subrogation of...

Question 13

A security interest will attach automatically upon default by the debtor.

Accepted Answer

The answer of A security interest will attach automatically upon...

Question 14

When the rights of a seller to the collateral are inferior to those of third persons, the seller has a perfected security interest.

Accepted Answer

The answer of When the rights of a seller to...

Question 15

A buyer has the right to transfer the collateral and require a determination of the amount owed.

Accepted Answer

The answer of A buyer has the right to transfer...

Question 16

A material change in the terms of the contract discharges the surety from further liability.

Accepted Answer

The answer of A material change in the terms of...

Question 17

If a creditor damages collateral security given to secure a debt, surety is not discharged.

Accepted Answer

The answer of If a creditor damages collateral security given...

Question 18

A contract of suretyship is an agreement whereby one party promises to be responsible for the debt of another.

Accepted Answer

The answer of A contract of suretyship is an agreement...

Question 19

A creditor may sell the collateral at any time the debtor is at risk of default.

Accepted Answer

The answer of A creditor may sell the collateral at...

Question 20

Discharge of a surety occurs:&#10;A)if the creditor extends the time of the debt with the consent of the surety.&#10;B)if the creditor continues to hold the collateral security of the debtor.&#10;C)in case of any reduction in the rate of interest.&#10;D)in the case of return of collateral security to the debtor.

Accepted Answer

The answer of Discharge of a surety occurs:&#10;A)if the creditor...

Deck 37: Security Devices