1. To buy a delivery truck, Food-To-Go LLC borrows funds from Grow-Your-Business Inc. secured by the borrowers...

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1. To buy a delivery truck, Food-To-Go LLC borrows funds from Grow-Your-Business Inc. secured by the borrower’s interest in the truck. The lender files a financing statement but not a continuation statement. Food-To-Go sells the truck to Haul-Away Corporation, a purchaser for value, and later defaults on the debt to Grow-Your-Business. Entitled to the truck is
a. Haul-Away Corporation.
b. Food-To-Go LLC.
c. the state in which Food-To-Go LLC is registered.
d. Grow-Your-Business Inc.

2. Mobile Talk LLC sells phones. The phones are the collateral for a loan from Noble Bank to the seller. The parties agree to extend the UCC’s automatic-perfection period for proceeds. In regard to the bank’s interest in the proceeds, this agreement
a. extinguishes the interest after the automatic-perfection period.
b. effectively relinquishes the bank’s interest.
c. has no effect on the bank’s interest.
d. permits the interest to remain perfected.

3. To obtain working capital, Mining Company puts up all of its equipment as security to borrow $100,000 from National Bank, which agrees to advance up to $100,000 more in the future. The bank properly perfects its security interest. To use the same collateral as security for a future advance, the bank must
a. file a new financing statement.
b. re-perfect its security interest by possession.
c. none of the choices.
d. execute a new security agreement.

4. Rico borrows funds from Suburban Bank secured by Rico’s house. Rico defaults on the debt. The bank’s options include
a. repossessing the collateral and disavowing the security interest.
b. disposing of the collateral in any commercially reasonable manner.
c. retaining the security interest and pursuing a judicial remedy.
d. destroying the collateral and collecting the unpaid debt from Reg.

5. Best Feed Company and Countywide Loans Inc. each hold a security interest in property owned by Dairy Farm. Neither lender’s interest is perfected. Priority between these security interests is generally determined by
a. the custom in the trade.
b. the time of attachment.
c. the time of perfection.
d. the amount of the claim.

6. The payment of Commerce Inc.’s debt to Debt Service LLC is guaranteed by the firm’s property. Debt Service is most likely to perfect its interest by
a. insuring the property for the full amount of its value.
b. filing a financing statement with the appropriate authority.
c. calculating the precise amount of the debt.
d. correcting grammatical errors in the parties’ written agreement.

7. Loan Office Inc. has a security interest against Manufacturing Company that is enforceable. In other words, with respect to the collateral, the creditor’s rights are said to
a. process.
b. attach.
c. mature.
d. perfect.

8. To create an enforceable security interest between Mortgage Bank and National Property Company in a written security agreement, the agreement must be signed by
a. the creditor.
b. all of the choices.
c. the debtor.
d. a disinterested third-party witness.

9. Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products’ default by
a. perfection.
b. redemption.
c. assignment.
d. retention.

10. Capital Inc. holds a security interest in Discount Store’s inventory. The parties agree that the interest will continue in the collateral even if it is sold, exchanged, or disposed of in some other way. This is
a. a continuation statement.
b. a purchase-money security interest.
c. the right of redemption.
d. a floating lien.