Which of the Following Is False Regarding a Creditor's Rights

question 34

Multiple Choice

Which of the following is false regarding a creditor's rights to collateral upon a debtor's default?

• A) If a debtor defaults on a loan, the secured party can take possession of the collateral so long as the debtor does not breach the peace.
• B) Under the UCC, the secured party can sell, lease, or transfer the collateral in any commercially reasonable method.
• C) Regardless of where the collateral is sold, the secured party must strive to receive the best price for the collateral.
• D) Instead of disposing of the collateral, the secured party may choose to keep the collateral in full or partial satisfaction of the debt.
• E) A debtor in default has no rights in regard to whether collateral is retained by the secured party or sold.

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Definitions:

Asset Allocation Fund

A mutual fund that spreads its investments across various asset classes, aiming to reduce risk through diversification.

Sector Fund

A mutual fund that invests exclusively in a particular sector of the economy, such as technology, health care, or finance.

Money Market Funds

Mutual funds that invest in short-term debt securities such as government bonds, treasury bills, and commercial paper, offering investors liquidity and safety.

NAV

NAV, or Net Asset Value, represents the per-share market value of a fund's assets minus its liabilities, crucial for evaluating investment funds.