Reference - Overextended Debtor

question 24

Multiple Choice

Reference - Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the term for the type of agreement Dennis had with ABC Electronics?

• A) A pledged money interest.
• B) A collateralized interest.
• C) A purchase-money security interest.
• D) A security perfection interest.
• E) A cash deferred security interest.

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Definitions:

Inflation Rate

The rate at which the overall cost of goods and services in an economy increases over time.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

M x V = P x Y

The equation representing the quantity theory of money, where M is the money supply, V is the velocity of money, P is the price level, and Y is the real output.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, indicative of inflation or deflation.