Under the Code, collateral is classified according to:
A) its nature and use.
B) the fundamental rights of the secured party.
C) the fundamental rights of the debtor.
D) None of these.

Question

Quizplus · Accepted Answer

Collateral is classified according to its nature and use under the Code. This is because the nature and use of collateral impact its value and potential secondary marketability, which are important considerations for both the secured party and the debtor. The fundamental rights of both parties are protected under the Code, but this does not determine the classification of collateral.

Under the Code, Collateral Is Classified According To