Asked by Tiana Hailey on Apr 26, 2024
Verified
Which of the following corresponds to the priority rule for purchase money security interests in inventory?
A) The PMSI has priority if it is perfected at the time the debtor receives possession of the inventory.
B) The PMSI has priority if it is perfected within 20 days after the debtor receives possession of the inventory.
C) The PMSI has priority if the holder of the competing security interest received notification within three years before the debtor receives the inventory.
D) The PMSI has priority when it has been filed or perfected before the other interest on the same collateral.
PMSI
Purchase Money Security Interest, a legal claim that allows a lender to repossess or foreclose on property if the borrower defaults, specifically when the loan was used to purchase the property.
Priority Rule
A principle in law that determines the precedence of claims, rights, or interests in order to resolve conflicts between parties.
Inventory
The total amount of goods and materials held in stock by a business, intended for sale or production purposes.
- Understand the prioritization rules for conflicting security interests, including purchase money security interests (PMSI) and their exceptions.
Verified Answer
Learning Objectives
- Understand the prioritization rules for conflicting security interests, including purchase money security interests (PMSI) and their exceptions.
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