Dorian Gray takes out loans with each of Bank 1 (for $10,000), Bank 2 (for $20,000), Bank 3 (for $30,000) and Bank 4 ($40,000) granting an interest in a painting valued at $200,000, to secure each loan.Mr. Gray subsequently defaults on all four of the loans.Bank 1 has first priority, Bank 2 has second priority, Bank three has third priority and Bank 4 has fourth priority.Bank 2 decides to foreclose on the painting.

a.Assuming that the cost of the foreclosure sale is $5,000, and that the sale yields $100,000, how much money will each Bank receive from the sale?

b.At the conclusion of the sale, which bank(s), if any, will still have a security interest in the painting?