Asked by Thanh Nhàn on May 27, 2024
Verified
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,Dennis was unable to continue making payments on the television because he had bought a boat,a new car,an expensive engagement ring for his girlfriend,and some other items.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 correct designation for the television in the agreement between Dennis and the electronic store?
A) Pledged goods
B) Acknowledged goods
C) Collateral
D) Defined security
E) Illegal security
Security Interest
A legal claim or encumbrance on property or assets, securing the payment of a debt or performance of some other obligation.
Collateral
Assets pledged by a borrower to secure a loan or credit, which can be seized by the lender if the borrower fails to repay.
Perfected Interest
A legal claim or lien that has been formally established to secure priority over other claims concerning the same asset or property.
- Analyze the privileges and duties of entities participating in transfers safeguarded with personal assets.
Verified Answer
DJ
David JordanMay 28, 2024
Final Answer :
C
Explanation :
Collateral is property that is subject to the security interest.
Learning Objectives
- Analyze the privileges and duties of entities participating in transfers safeguarded with personal assets.