Which of the Following Is True If a Buyer of a Consumer

question 38

Multiple Choice

Which of the following is true if a buyer of a consumer good subject to purchase-money security interest later sells the good?

• A) The security interest immediately terminates.
• B) The security interest passes to the new buyer.
• C) Regardless of whether the buyer is aware of the security interest, so long as the buyer purchases the good for his or her personal use, the security interest terminates if the sale to the new buyer is made before the original secured party files a financial statement.
• D) As long as the buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financing statement, the new buyer obtains the good free of the security interest.
• E) As long as the buyer is not aware of the security interest, purchases the good for personal use or resale, and purchases good before the secured party files a financial statement, the buyer obtains the good free of the security interest.

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