Homeowner purchased a jet ski for personal use, financing it with boat and ski merchant who created a security interest in the ski. A week later, homeowner took out a home improvement loan from bank, using the jet ski as collateral. Bank perfected its security interest in the ski by filing a UCC $1.$ ?Assume homeowner defaults on both debts. Whose security interest has priority in the jet ski?

Group of answer choices

Both merchant and bank have perfected security interests. The first to perfect has priority. So merchant gets the jet ski collateral.

Bank $$ s security interest has priority in the collateral because it was the first to perfect its security interest by filing a UCC $1.$

Bank gets the jet ski because a security interest perfected by a UCC $1$ ?filing takes priority over a merchant $$ s purchase money security interest in consumer goods.

Merchant $$ s security interest takes priority because it was the first one to be created and attached.