At an Auction for the First Time,Dulcinea Bids on a One-Hundred-Year-Old

question 26

Multiple Choice

At an auction for the first time,Dulcinea bids on a one-hundred-year-old Edison-brand phonograph,believing that it is worth more than the price asked.When the item proves to be less valuable,Dulcinea is

• A)liable on the bid.
• B)not liable on the bid because Dulcinea overestimated the value of the auctioned item.
• C)not liable on the bid because the auctioneer overstated the value of the auctioned item.
• D)not liable on the bid because this was Dulcinea's first auction.

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Definitions:

Secured Creditors

Creditors who have a legal claim or lien on specific assets of the debtor as collateral for the debt.

Unsecured Creditors

Creditors who have claims on the assets of a debtor but no collateral securing those claims.

Non-exempt Asset

An asset that is not protected under bankruptcy laws and can be seized to satisfy creditor claims.

Perfected Security Interest

A legal state where a creditor has taken the necessary steps to establish and maintain a priority claim on a debtor's collateral in case of default.