Marcia buys a $3,000 high-definition plasma television for her home on credit extended by the seller,Current City.Current City requires Marcia to sign a security agreement.Current City has a ________ interest in the television that is automatically perfected at the time of the credit sale.

Question

Quizplus · Accepted Answer

A purchase money security interest (PMSI) is created when a seller extends credit to a buyer to purchase goods. In this case, Current City has a PMSI in the television, meaning the security interest is automatically perfected at the time of the credit sale. This gives Current City priority over other creditors if Marcia defaults on her payments.

Marcia Buys a $3,000 High-Definition Plasma Television for Her Home