Which of the Following Is True Regarding a Security Interest

question 30

Multiple Choice

Which of the following is true regarding a security interest in consumer goods?

• A) A financing statement must be filed in order to perfect a security interest in consumer goods.
• B) Under federal consumer protection legislation, a seller may not hold a security interest in consumer goods.
• C) Under most state laws, a seller may not hold a security interest in consumer goods.
• D) When a creditor sells a consumer good to a debtor on a credit basis, the security interest perfects automatically.
• E) When a creditor sells a consumer good to a debtor on a credit basis, the security interest is perfected by the seller's possession.

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Definitions:

Opportunity Cost

The potential benefit that may be obtained from following an alternative course of action.

Nonfinancial Information

Information that is not monetary in nature, such as customer satisfaction, employee turnover, and operational efficiency, used in decision making.

Unprofitable Segment

A division or branch of a company that does not generate profit and may cause a financial drain on the business.

Hurdle Rate

The minimum rate of return on an investment that is required by a manager or investor to proceed with the investment.