30) Morticia sells her waterfront property, worth $2 million, to Fester, Inc. in exchange for stock of the same price. Later, Fester's shareholders learn that the property was only worth $1 million. Which of the following is true?

Select one:

a.Morticia must pay Fester Inc. the difference in price between the value of the property and the value of the stock she received.

b.Fester Inc. must sell the waterfront property and give the proceeds to Morticia.

c.Morticia must pay Fester Inc. the difference in price between the value of the property when she purchased it and the value of the property when she sold it to Fester Inc. in exchange for shares of stock.

31) Michigan State Credit Union loans money to Professor Balding, securing the loan with his secret invention. The Credit Union is advised by its attorney to file a financing statement. Why should it do so?

Select one:

a.The financing statement protects the Credit Union's priority rights with other creditors by giving notice it has a security interest in the collateral.

b.There are criminal penalties for failing to file.

c.Filing the financing statement is necessary to complete the attachment requirement in order to create security interest.

36) At her neighbor's garage sale, Constance buys 2 living room couches and a coffee table for $250, which she uses to replace the broken furniture at home. Unbeknownst to Constance, the neighbor still owed money to All Purpose Furniture, Inc., where he had purchased the furniture on credit. If All Purpose informs Constance that she must return the furniture because they have a security interest in the collateral

Select one:

a. They are correct; a perfected security interest takes priority.

b.They are correct; Constance took the furniture at her own risk & is subject to All Purpose's security interest.

c. They are incorrect; Constance takes the furniture free of All Purpose's security interest because she is a buyer in the ordinary course of business.

37) John Perry borrowed money from Airborne Bank to purchase a Lear Jet. The loan was secured by the Jet. When John defaulted on the loan, Airborne repossessed and secretly sold the Jet, at a discount, to the President of the Bank. This is an example of

Select one:

a. The repossession and disposition of the collateral was not commercially reasonable because John Perry wasn't notified, and the Jet was sold privately at a discount.

b. The repossession and disposition of the collateral was not commercially reasonable because the Bank's President did not have his Pilot's License.

c. A commercially reasonable repossession and disposition of the collateral because the Bank did not breach the peace.