1. Kathy Knittle borrowed $20,000 from Bank to buy inventory to sell in her knit shop and signed a security agreement listing as collateral the entire present and future inventory in the shop, including proceeds from the sale of inventory. Bank filed no financing statement. A month later, Knittle borrowed $5,000 from Creditor, who was aware of Bank's security interest. Knittle then declared bankruptcy. Who has priority, Bank or Creditor?

1. Assume the same facts as in Exercise 1, except Creditoragain, aware of Bank's security interestfiled a financing statement to perfect its interest. Who has priority, Bank or Creditor?