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Multiple Choice Quiz
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1
A(n) __________ transaction is a transaction in which the payment of a debt is guaranteed by personal property owned by the debtor.
A)Unsecured
B)Secured
C)Unconditional
D)Conditional
2
Article __________ of the Uniform Commercial Code (UCC) governs secured transactions in personal property (as opposed to real property).
A)7
B)9
C)11
D)13
3
__________ is the property that is subject to a security interest.
A)A fixture
B)Collateral
C)Dispensable paper
D)None of the above
4
Which of the following is not a step the secured party must take in order to create a security interest?
A)The secured party and the debtor must create a security agreement and either document the security agreement, or allow the secured party possession of the collateral
B)The secured party must give value to obtain the security agreement
C)The secured party must notify the U.S. Patent and Trademark Office of the security agreement
D)The debtor must have a right in or to the collateral
5
A(n) ___________ is formed when a debtor uses borrowed money from the secured party to buy the collateral.
A)Conditional contract
B)Unconditional contract
C)Purchase money security interest
D)Purchase money security discharge
6
__________ of a security interest is defined as the series of legal steps a secured party must take to protect its right in the collateral from other creditors who wish to have their debts returned through the same collateral.
A)Absolution
B)Dissolution
C)Perfection
D)Qualification
7
The transfer of collateral to the secured party for the purpose of perfection is called a(n) __________.
A)Allotment
B)Pledge
C)Allocation
D)Presentment
8
If an item is purchased for __________ use, the security interest is not perfected automatically; instead, the secured party would have to file a financing statement.
A)Business
B)Consumer
C)A. and B.
D)Neither A. nor B.
9
A(n) __________ is an amendment to a financing statement that states that the debtor has no obligation to the secured party.
A)Termination statement
B)Finalization statement
C)Absolution statement
D)Parole statement
10
When a debtor fails to make payments on a loan or declares bankruptcy, the debtor has __________ on the loan.
A)Disparaged
B)Defamed
C)Defaulted
D)Denigrated





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