If Michael, ABC Electronics, and XYZ Credit Have a Dispute

question 6

Multiple Choice

If Michael, ABC Electronics, and XYZ Credit have a dispute regarding entitlement to the television, who is likely to win and why?

• A) ABC Electronics will prevail because, as a seller of consumer goods, it did not need a perfected security interest in order to prevail against other creditors.
• B) ABC Electronics will prevail because it had a perfected security interest.
• C) XYZ Credit will prevail because although ABC Electronics had a perfected security interest, it did not file a financing statement.
• D) XYZ Credit will prevail because a luxury good was involved and, although ABC Electronics had a perfected security interest, it did not file a financing statement as required within 10 days of the sale.
• E) XYZ Credit will prevail because it had a perfected security interest in a greater amount of goods than did ABC Electronics.

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Definitions:

In-The-Money

A term used in options trading to describe an option that has intrinsic value, where the strike price is favorable compared to the current market price of the underlying asset.

Stock Price

The current price at which a share of a company is being bought or sold in the stock market.

Exercise Price

The price at which the holder of an option can buy (in the case of a call) or sell (in the case of a put) the underlying security or commodity.

Time Value

The portion of an option's price that exceeds its intrinsic value, reflecting the potential for further gain in value due to the remaining time until expiration.