What of the following is true about perfection by possession of collateral?

Question

Quizplus · Accepted Answer

Perfection by possession of collateral means that a creditor has physical possession of the collateral, and in that case, the creditor does not have to file a financing statement to perfect their security interest. This is because possession itself acts as a notice to other parties that the creditor has a security interest in the collateral. However, if the creditor loses possession of the collateral, they may need to file a financing statement to maintain their security interest.

What of the Following Is True About Perfection by Possession