In June,Alicia Borrowed $10 000 from the Toronto-Dominion Bank to Start

question 30

Multiple Choice

In June,Alicia borrowed $10 000 from the Toronto-Dominion Bank to start her record company.She agreed to give the bank a security interest in all of her assets,but the agreement was never recorded in writing.In July,she sold some CD-burning equipment to Record Supply Inc.Which of the following best describes the bank's claim against the equipment?

• A)The bank can enforce its security interest in the equipment against Record Supply because the loan predated the sale of the equipment.
• B)The bank cannot enforce its security interest in the equipment against Record Supply because the bank's interest never attached to the equipment.
• C)The bank cannot enforce its security interest in the equipment against Record Supply because there is no privity of contract between the bank and Record Supply.
• D)The bank can enforce its security interest in the equipment against Record Supply because the rights of secured creditors always prevail against people who buy goods that were subject to a security interest.
• E)The bank cannot enforce its security interest in the equipment against Record Supply because it has not filed a financing statement to register its security interest.

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Definitions:

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, within a specified time period.

Quantity Supplied

The amount of a product or service that producers are willing and able to sell at a given price level during a specific time period.

Inelastic Demand

A market situation in which the demand for a product does not significantly change with its price increase or decrease.