Which of the Following Statements Is True of Sale of Collateral

question 38

Multiple Choice

Which of the following statements is true of sale of collateral?

• A) In disposing of the collateral, the creditor must use a commercially reasonable method to produce the greatest benefit to himself and not to the debtor.
• B) The creditor must sell the collateral unless the consumer orally objects to the sale, otherwise, the creditor may keep the collateral in satisfaction of the debt.
• C) If less than 80 percent of the purchase price has been paid, the creditor may propose to the debtor that the creditor keep the collateral in satisfaction of the debt.
• D) If the creditor has a security interest in consumer goods and the debtor has paid 60 percent or more of the purchase price, the creditor must sell the repossessed collateral.

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Definitions:

Initial Cost

The amount of money spent to acquire, or invest in, an asset or project before it begins generating revenue.

Rate of Return

The enhancement or diminution in an investment’s value over a fixed span, presented as a percentage of the investment’s original price.

Rate of Return

The upward or downward movement in the value of an investment across a predefined period, depicted as a percentage of the initial investment cost.

Equipment

Tangible physical assets used in the operation of a business, such as machinery, computer hardware, and vehicles, that have a longer life expectancy and are not intended for resale.