Sarah, a Public Servant, Gave a Security Interest to Her

question 40

Multiple Choice

Sarah, a public servant, gave a security interest to her brother Peter in all her assets to secure her obligation to repay a loan from Peter. Peter filed a financing statement to register his interest. Subsequently, Joan bought some furniture from Sarah. Joan had no knowledge of Peter's security interest. Which of the following statements best describes Joan's legal position?

• A) Joan bought the furniture free of Peter's security interest because she had no notice of it.
• B) Joan's interest in the furniture is subject to Peter's security interest.
• C) Joan's bought the furniture free of Peter's security interest because Sarah is not in the business of selling furniture.
• D) Joan is obliged to give the furniture to Peter.
• E) Joan bought the furniture free of Peter's security interest because security interests of close family relatives are not enforceable against third parties.

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Definitions:

Production Estimates

Projections or forecasts of the volume or quantity of goods that a company plans to manufacture in a given period.

Units

In the context of business, units refer to the individual items or quantities of a product or service that are produced or sold.

Production Budget

An estimation of the total costs to produce a set amount of goods over a specific period.

Units

In accounting and manufacturing, this refers to the individual countable items or quantities of a product or service that a company produces or transacts in.