Question

A new security Agreement must be prepared:

a) Annually
b) When significant changes in collateral occur
c) When PLS action is taken, even if there is no change in security
d) Periodically as needed

Answer 1

A new security agreement must be prepared when significant changes in collateral occur, as this would alter the terms of the security interest of a loan.

Step-by-step explanation:

The question relates to the preparation of a new security agreement in the context of financial transactions, particularly loans. It asks under which circumstances a new security agreement must be prepared. A security agreement is a legal document that outlines the terms for the provision of collateral—property or equipment that a lender has the right to seize and sell if a loan is not repaid. Given the provided information, the most accurate answer is (b) when significant changes in collateral occur, since this would likely change the terms of the security interest.