Question 1

Which of the following is true of a financing statement? ​

Accepted Answer

A) It is not signed by a debtor. 
B) It can be substituted by a security agreement if it contains the appropriate information. 
C) It does not describe the collateral. 
D) It contains the mailing address of a guarantor. 
A) It is not signed by a debtor. 
B) It can be substituted by a security agreement if it contains the appropriate information. 
C) It does not describe the collateral. 
D) It contains the mailing address of a guarantor. B

Question 2

A surety or guarantor may call on the creditor to proceed to compel the payment of the debt.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following best describes the right to indemnity?

Accepted Answer

A) It is the right of a creditor to receive interest on the debt. 
B) It is the right of a principal to receive compensation from the creditor. 
C) It is the right of a guarantor to be reimbursed by the principal. 
D) It is the right of a creditor to withhold payment in the case of a dispute. 
A) It is the right of a creditor to receive interest on the debt. 
B) It is the right of a principal to receive compensation from the creditor. 
C) It is the right of a guarantor to be reimbursed by the principal. 
D) It is the right of a creditor to withhold payment in the case of a dispute. C

Question 4

A contract of suretyship is an agreement whereby one party promises to be responsible for the debt of another.

Accepted Answer

A) True 
 B)False

Question 5

A buyer has the right to transfer the collateral and require a determination of the amount owed.

Accepted Answer

A) True 
 B)False

Question 6

A creditor may sell the collateral at any time the debtor is at risk of default.

Accepted Answer

A) True 
 B)False

Question 7

A material change in the terms of the contract discharges the surety from further liability.

Accepted Answer

A) True 
 B)False

Question 8

Most contracts of surety need not be in writing.

Accepted Answer

A) True 
 B)False

Question 9

A party who has primary liability is the creditor.

Accepted Answer

A) True 
 B)False

Question 10

A security agreement contains the terms of payment and names of the parties.

Accepted Answer

A) True 
 B)False

Question 11

If a creditor damages collateral security given to secure a debt, surety is not discharged.

Accepted Answer

A) True 
 B)False

Question 12

Discharge of a surety occurs:

Accepted Answer

A) if the creditor extends the time of the debt with the consent of the surety. 
B) if the creditor continues to hold the collateral security of the debtor. 
C) in case of any reduction in the rate of interest. 
D) in the case of return of collateral security to the debtor. 
A) if the creditor extends the time of the debt with the consent of the surety. 
B) if the creditor continues to hold the collateral security of the debtor. 
C) in case of any reduction in the rate of interest. 
D) in the case of return of collateral security to the debtor.

Question 13

​ Explain the right of subrogation of a surety.

Accepted Answer

When a guarantor or a surety pays the de

Question 14

A party who undertakes to be responsible for another is a .

Accepted Answer

A) guarantor 
B) creditor 
C) principal 
D) debtor 
A) guarantor 
B) creditor 
C) principal 
D) debtor

Question 15

Which of the following is a requirement of a security agreement?

Accepted Answer

A) It must be an unwritten agreement. 
B) It must describe the collateral. 
C) It must be signed by a seller. 
D) It must contain the specific instrument of payment. 
A) It must be an unwritten agreement. 
B) It must describe the collateral. 
C) It must be signed by a seller. 
D) It must contain the specific instrument of payment.

Question 16

is/are items of personal property so securely attached to the land that they become a part of it.

Accepted Answer

A) Fixtures 
B) Equipment 
C) Inventory 
D) Consumer goods 
A) Fixtures 
B) Equipment 
C) Inventory 
D) Consumer goods

Question 17

When the rights of a seller to the collateral are inferior to those of third persons, the seller has a perfected security interest.

Accepted Answer

A) True 
 B)False

Question 18

Guarantors or sureties who have paid more than their proportionate share of the loss are entitled to from the coguarantors.

Accepted Answer

A) exoneration 
B) subrogation 
C) alteration 
D) contribution 
A) exoneration 
B) subrogation 
C) alteration 
D) contribution

Question 19

A security interest will attach automatically upon default by the debtor.

Accepted Answer

A) True 
 B)False

Question 20

Companies may purchase insurance against the risk of dishonest employees, often referred to as a . ​

Accepted Answer

A) coupon bond 
B) registered bond 
C) fidelity bond 
D) principal bond 
A) coupon bond 
B) registered bond 
C) fidelity bond 
D) principal bond

Exam 37: Security Devices

Which of the following is true of a financing statement? ​

A surety or guarantor may call on the creditor to proceed to compel the payment of the debt.

Which of the following best describes the right to indemnity?

A contract of suretyship is an agreement whereby one party promises to be responsible for the debt of another.

A buyer has the right to transfer the collateral and require a determination of the amount owed.

A creditor may sell the collateral at any time the debtor is at risk of default.

A material change in the terms of the contract discharges the surety from further liability.

Most contracts of surety need not be in writing.

A party who has primary liability is the creditor.

A security agreement contains the terms of payment and names of the parties.

If a creditor damages collateral security given to secure a debt, surety is not discharged.

Discharge of a surety occurs:

​ Explain the right of subrogation of a surety.

A party who undertakes to be responsible for another is a .

Which of the following is a requirement of a security agreement?

is/are items of personal property so securely attached to the land that they become a part of it.

When the rights of a seller to the collateral are inferior to those of third persons, the seller has a perfected security interest.

Guarantors or sureties who have paid more than their proportionate share of the loss are entitled to from the coguarantors.

A security interest will attach automatically upon default by the debtor.

Companies may purchase insurance against the risk of dishonest employees, often referred to as a . ​

Introduction to Law

Courts and Court Procedures

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Contracts

Warranties Product Liability and Consumer Protection

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties, Holders in Due Course and Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Introduction to Business Organizations

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corporation

Principles of Insurance

Types of Insurance

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills Inheritances and Trust

Filters

Which of the following is true of a financing statement?

Explain the right of subrogation of a surety.

Companies may purchase insurance against the risk of dishonest employees, often referred to as a .