Question 1

Perfection by public filing of a financing statement in the appropriate public office serves as a(n)_____ notice to the world.

Accepted Answer

The most common way of perfecting a security interest is to file a financing statement in the appropriate public office.The financing statement serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Question 2

A _____ serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Accepted Answer

The most common way of perfecting a security interest is to file a financing statement in the appropriate public office.The financing statement serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Question 3

Which of the following is a way of perfecting a security interest?

Accepted Answer

Under the Code,there are three main ways of perfecting a security interest.It can be done either by filing a public notice of the security interest;by the creditor's taking possession or control of the collateral;or in certain transactions,by mere attachment of the security interest,which is known as automatic perfection.

Question 4

Which of the following is the only form of perfection that occurs without the giving of public notice?

Accepted Answer

Perfection by mere attachment of the security interest,sometimes known as automatic perfection,is the only form of perfection that occurs without the giving of public notice.It occurs automatically when all the requirements of attachment are complete.

Question 5

Which of the following is most likely to be perfected by the secured party's possession of the collateral?

Accepted Answer

Possession works for most kinds of collateral except for accounts receivable and general intangibles.Possession is also a possible way of perfecting a security interest in inventory.This is sometimes achieved through a field warehousing arrangement.

Question 6

Article 9 of the UCC which governs secured transactions has been adopted in how many states?

Accepted Answer

Article 9 of the UCC has been adopted by all 50 states with effective dates ranging from 2001 to 2002.

Question 7

The Total Household Appliance store sells a refrigerator to Alvin,on the condition of making payments in installments.In this case,the store:

Accepted Answer

A creditor who sells goods to a consumer on credit,or who lends money to enable a consumer to buy goods has a purchase money security interest in consumer goods.The creditor does not have to file his purchase money security interest in the refrigerator.The security interest is considered perfected just by virtue of its attachment to the refrigerator in the hands of the consumer.

Question 8

The perfection of a security interest by filing a financing statement:

Accepted Answer

The most common way of perfecting a security interest is to file a financing statement in the appropriate public office.The financing statement serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Question 9

What type of agreement is required in nearly all security interest transactions?

Accepted Answer

According to UCC section 9-203 an authenticated security agreement is required in all security interest cases except where the creditor has possession of the collateral.

Question 10

Edith purchases a television set from Big Al's Electronic Emporium,agreeing to pay Big Al in monthly installments on a 12-month payment plan.In order to have a perfect security interest in the television set,Big Al:

Accepted Answer

A creditor who sells goods to a consumer on credit,or who lends money to enable a consumer to buy goods has a purchase money security interest in consumer goods.The creditor does not have to file his purchase money security interest in the set.The security interest is considered perfected just by virtue of its attachment to the set in the hands of the consumer.

Question 11

Which of the following is true about financing statements?

Accepted Answer

To be sufficient,the financing statement must contain the names of the debtor;give the name of the secured party;and contain a statement indicating or describing the collateral covered by the financing statement.

Question 12

Which of the following is true about possession of collateral by secured party as public notice?

Accepted Answer

Change of possession is not a common or convenient way for perfecting most security interests in consumer goods.Possession of collateral by the creditor is often the best way to perfect a security interest in chattel paper and negotiable documents of title.Possession is also a possible way of perfecting a security interest in inventory.This is sometimes achieved through a field warehousing arrangement.Possession by the creditor is usually not a practicable way of perfecting a security interest in equipment or farm products.

Question 13

Which of the following is a means of obtaining control over the collateral?

Accepted Answer

A secured party can provide a form of public notice by controlling the collateral [UCC 9-314].Control is the only perfection method if the collateral is a deposit account [UCC 9-312(b)(1)].One of the ways a secured party obtains control is by becoming the bank's customer for the deposit account.

Question 14

Under the UCC Secured Transactions Article,for a security interest to attach,the:

Accepted Answer

One of the basic requirements for a security interest to be attached to the goods of a debtor is that there must be an agreement by the debtor granting the creditor a security interest in particular property (collateral)or the secured party must have possession of the property.

Question 15

Which of the following are automatically covered as of the time the security interest attaches to the collateral?

Accepted Answer

Proceeds on the sale or other disposition of collateral to which a security interest has been attached are automatically covered as of the time the security interest attaches to the collateral [UCC 9-203(f)].

Question 16

_____ refer(s)to the goods used or bought primarily for personal purposes.

Accepted Answer

Consumer goods refer to goods used or bought primarily for personal,family,or household use,such as automobiles,furniture,and appliances [UCC 9-102(a)(23)].

Question 17

According to the Code classifications of collateral,Investment property includes:

Accepted Answer

Investment property includes securities such as stocks,bonds,and commodity contracts [UCC 9-102(a)(49)].

Question 18

Samson Dsouza submits a financing statement in the year 2000 to perfect his security interest against Kevin.Later in the year 2006,Samson tries to attach the security interest in the property.Will Samson succeed in the attachment of the security interest?

Accepted Answer

A financing statement is effective for a period of five years from the date of filing,and it lapses then unless a continuation statement has been filed before that time.

Question 19

Which of the following elements is an exception that validates a financing statement which covers goods that are to become fixtures,without it being lapsed?

Accepted Answer

A financing statement is effective for a period of five years from the date of filing,and it lapses then unless a continuation statement has been filed before that time.An exception is made for real estate mortgages that are effective as fixture filings-they are effective until the mortgage is released or terminates [UCC 9-515].

Question 20

Which of the following is true about continuation statements?

Accepted Answer

A continuation statement may be filed within six months before the five-year expiration date.The continuation statement must be signed by the secured party,identify the original statement by file number,and state that the original statement is still effective.Successive continuation statements may be filed [UCC 9-403(3)].

Quiz 29: Security Interests in Personal Property

Perfection by public filing of a financing statement in the appropriate public office serves as a(n) _____ notice to the world.

A _____ serves as constructive notice to the world that the creditor claims an interest in collateral that belongs to a certain named debtor.

Which of the following is a way of perfecting a security interest?

Which of the following is the only form of perfection that occurs without the giving of public notice?

Which of the following is most likely to be perfected by the secured party's possession of the collateral?

Article 9 of the UCC which governs secured transactions has been adopted in how many states?

The Total Household Appliance store sells a refrigerator to Alvin,on the condition of making payments in installments.In this case,the store:

The perfection of a security interest by filing a financing statement:

What type of agreement is required in nearly all security interest transactions?

Edith purchases a television set from Big Al's Electronic Emporium,agreeing to pay Big Al in monthly installments on a 12-month payment plan.In order to have a perfect security interest in the television set,Big Al:

Which of the following is true about financing statements?

Which of the following is true about possession of collateral by secured party as public notice?

Which of the following is a means of obtaining control over the collateral?

Under the UCC Secured Transactions Article,for a security interest to attach,the:

Which of the following are automatically covered as of the time the security interest attaches to the collateral?

_____ refer(s) to the goods used or bought primarily for personal purposes.

According to the Code classifications of collateral,Investment property includes:

Samson Dsouza submits a financing statement in the year 2000 to perfect his security interest against Kevin.Later in the year 2006,Samson tries to attach the security interest in the property.Will Samson succeed in the attachment of the security interest?

Which of the following elements is an exception that validates a financing statement which covers goods that are to become fixtures,without it being lapsed?

Which of the following is true about continuation statements?