Robert Borrows $500 from a Pawn Shop,leaving His Class Ring

question 75

Multiple Choice

Robert borrows $500 from a pawn shop,leaving his class ring as collateral.Later,Robert borrows $200 from a bank.Robert signs a security agreement,later filed by the bank,giving the bank a security interest in this ring.If Robert defaults on both loans,who has superior rights to the ring?

• A) the pawn shop, because it was the first security agreement to be formed
• B) the pawn shop, because it was the first to perfect
• C) the bank, unless the pawn shop's security agreement was in writing
• D) the bank, because the pawn shop's interest is not perfected
• E) the bank, because banks have priority over other creditors

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