The CEO of a Firm Just Learned That a Small

question 267

Multiple Choice

The CEO of a firm just learned that a small, but highly progressive, competitor is for sale. This is an unexpected opportunity and one that the CEO would like to pursue immediately. The motive behind holding cash for such an event is called the ____ motive.

• A) Transaction.
• B) Speculative.
• C) Reserve.
• D) Precautionary.
• E) Concentration.

---

Definitions:

Perfection by Possession

A legal principle that secures a creditor's interest in a debtor's collateral upon taking possession of it.

Secured Party

A lender or creditor who has a security interest in collateral owned by the debtor, which gives them a legal right to the property if the debtor defaults.

Secured Perfected Creditor

Refers to a creditor who has taken the necessary legal steps to secure a right in the borrower’s collateral, ensuring priority over claims made by other creditors.

After-Acquired Property

Property acquired by a debtor after an agreement or court order, which may become subject to claim by creditors.