[Pottery Store] A&B Bank Loaned Money to Potter's Pottery Store

question 49

Multiple Choice

[Pottery Store] A&B Bank loaned money to Potter's Pottery Store to finance the purchase of several kilns, a delivery van, and pottery wheels. In return, Potter's granted a security interest to A&B Bank for "all equipment of Potter's". The kiln manufacturer also wants to place a security interest on the kilns and the delivery van for Potter's Pottery.
-If the bank wants to have priority in its loan to the pottery store, how should the bank perfect its interest?

• A) The interest is perfected automatically because the collateral are goods.
• B) The bank would have to file a financing statement for all items.
• C) The bank would have to make a notation on the certificate of title for the van and would have to file a financing statement on the other items.
• D) The bank could make a notation on the certificate of title for the van and on the ownership documents of the other items because they are goods used to conduct business.
• E) The bank would have to make a notation on the certificate of title for the van, but the other items would be perfected automatically.

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Definitions:

Interdependence

A situation in which the outcome or payoff for each participant depends on the actions of others, commonly found in competitive and cooperative environments.

Market Structure

The organizational and other characteristics of a market that significantly affect the nature of competition and pricing within the market.

Product Diversity

The range of different products or services offered by a company or available in a market.

Monopolistic Competition

Monopolistic competition is a market structure characterized by many firms offering differentiated products or services, with some degree of market power due to product differentiation.