QUESTION 8

ABC Sales sells a machine to XYZ. The terms require XYZ to pay 50% of the price upon delivery and then 10% of the price every month for the next 5 months and ABC will retain a security interest in the goods until paid off. If XYZ keeps to these terms, in month three:

a. ABC has an insurable interest in the goods but XYZ does not.

b. Both ABC and XYZ have insurable interest in the goods.

c. Neither ABC not XYZ have an insurable interest in the goods.

d. XYZ has an insurable interest in the goods but ABC does not.