Bill Is in Business as a Contractor and Purchases a Tractor

question 16

Multiple Choice

Bill is in business as a contractor and purchases a tractor worth $100 000 with a loan from Bank X . The full value of the loan is put towards the purchase price and the Bank obtains and registers a security interest in the tractor. If Bill's business becomes bankrupt, the Bank may

• A) not seize the tractor, but the Bank may sue Bill personally for misrepresentation.
• B) seize the tractor, sell it, and recoup any short fall from the proceeds of the sale as a secured creditor from the business' estate.
• C) seize the tractor, sell it, and recoup any short fall as a general unsecured creditor.
• D) seize the tractor only if Bill agrees, but the Bank has no claim for any short fall thereafter.
• E) not seize the tractor and the Bank has no claim against Bill's business for the debt.

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Definitions:

Institutional Investors

Entities such as pension funds, insurance companies, and mutual funds that pool money to purchase securities, real estate, and other investment assets.

SEC Regulation

The rules and laws enforced by the U.S. Securities and Exchange Commission to regulate the securities industry and protect investors.

Speculative Policies

Financial strategies or investments with a high degree of risk, aimed at achieving substantial profits.

Under Management

Refers to assets or funds that are being professionally managed or overseen by financial firms or advisors.