Asked by Ronald Forrest on Jul 12, 2024
Verified
Which of the following is true regarding what may constitute collateral?
A) Goods, indispensable paper, intangibles, and proceeds may all constitute collateral.
B) Goods, indispensable paper, and intangibles may constitute collateral, but proceeds may not.
C) Goods may constitute collateral, but indispensable paper, intangibles, and proceeds may not.
D) Goods and proceeds may constitute collateral, but indispensable paper and intangibles may not.
E) Goods and intangibles may constitute collateral, but indispensable paper and proceeds may not.
Intangibles
Intangibles are assets that lack physical substance but possess value, such as intellectual property, goodwill, and brand recognition.
Goods
All physically existing things that are movable at the time of identification in the contract for sale.
Proceeds
The amount of money received from a transaction, often referring to the sale of assets or property.
- Identify what constitutes collateral and the classification of goods within the context of secured transactions.
Verified Answer
MM
Mansi MehindruJul 13, 2024
Final Answer :
A
Explanation :
Collateral can include a wide range of assets such as goods, indispensable papers (like negotiable instruments or documents of title), intangibles (like patents or copyrights), and proceeds derived from the sale or lease of these assets. This broad definition allows for various types of property to secure an obligation.
Learning Objectives
- Identify what constitutes collateral and the classification of goods within the context of secured transactions.
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