FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 37: Secured Transactions and Suretyship

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

A bond, which guarantees the performance of the terms of a contract, is a(n) :

A) judicial bond.
B) official bond.
C) performance bond.
D) fidelity bond.

E) B) and D)
F) C) and D)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Generally, when may a security interest be perfected in collateral?

A) By the secured party's filing a financing statement in the designated public office.
B) By the secured party's taking or retaining possession of the collateral.
C) Automatically, on the attachment of the security interest.
D) Temporarily, for a period specified by the Code
E) All of these, depending on the type of collateral.

F) A) and B)
G) A) and C)

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

If the debtor is in default and the secured party wants to repossess the collateral in order to sell it, he must get a court order to do so.

If the principal debtor defaults, the surety has rights against the principal debtor, third parties, and cosureties. These rights would include:

Attachment must occur in order to make a security interest enforceable against the debtor and against third parties.

Karl loaned Linda $100,000. Madeline agreed to act as surety for $100,000. Nora agreed to act as surety for $75,000 and Orville agreed to act as surety for $25,000. Linda later defaulted on the loan, and Karl is now demanding payment from Nora and Orville. What amount do Nora and Orville have to pay? If Nora and Orville pay, does Madeline have any obligation? Explain.

Subrogation includes:

A car buyer in the ordinary course of business will take free and clear of a security interest created by any person who owned the automobile prior to the dealer.

Assume you are the creditor in each of the following situations. Identify the kind of security agreement that is involved in each transaction and explain how you would perfect that agreement. a. You are the creditor (Everby Bank), and you lend Brisco Gaines $5,000 for a sound system. b. First Bank loans Doris $10,000 to purchase inventory for her store. c. First Bank loans Brad $5,000 to purchase a computer network for use in his store office. d. Kevin needs cash for gambling debts. He brings in his high-definition TV to secure a $500 loan.

The types of indispensable paper include:

If the surety is a(n) ___________, then the creditor may hold the surety liable as soon as the principal debtor defaults.

A PMSI is created in goods when a seller retains a security interest in the goods sold on credit by a security agreement.

A security interest in electronic chattel paper is perfected by automatic perfection.

First Bank loaned $100,000 to Central Office Supply Store to purchase computers for its inventory. Central signed a financing agreement, which First Bank duly filed in the appropriate public office. Lynn came into Central's store and purchased a computer that was subject to the security interest held by First Bank. Assuming that Lynn is a buyer in the ordinary course of business, whose interest in the computer has priority?

When Mark bought new office furniture on credit, Bartin's Office Supply Co. filed a financing statement. What would be required on the financing statement?

According to the UCC, a computer purchased by a CPA for use in her office will be classified as inventory.

A tangible or electronic record that evidences both a monetary interest and security interest in or a lease of specific goods is known as:

The promise of a surety is binding even without consideration.

If Regency Services, Inc. wishes to protect itself against the possible dishonesty of Chad, an employee who will be handling corporate funds, Regency may purchase a(n) :

A buyer in the ordinary course of business takes collateral (other than farm products) free of any security interest created by the buyer's seller, even if the security interest is perfected and the buyer knows of its existence.