Kimberly borrows $50, 000 from a bank.She gives the bank a security interest in her ________ inventory.This implies that if Kimberly does not repay the loan in the stipulated period, the bank can claim any assets she purchased post the draft of the security agreement.

Question

Quizplus · Accepted Answer

The term used to describe the security interest in Kimberly's inventory is "after-acquired," meaning that any assets she acquires in the future will also be subject to the bank's claim if she defaults on the loan. This type of security interest gives the bank greater protection and ensures that they will be able to recoup their losses in the event of default. The other choices, floating lien and future advance, are related concepts but do not accurately describe this particular situation. "Attached" simply means that the security interest has been created and is legally enforceable.

Kimberly Borrows $50, 000 from a Bank