Under UCC Section 9-203, attachment occurs when: (1) value has been given by the secured party (such as extending a loan); (2) the debtor has rights in the collateral or the power to transfer rights to a secured party; and (3) the debtor has authenticated a security agreement that describes the collateral, or the secured party has possession or control of the collateral. All three conditions must be met for attachment. Attachment makes the security interest enforceable against the debtor. Answer B is incorrect because filing a financing statement is for perfection, not attachment. Answer C adds irrelevant requirements. Answer D is incorrect because physical possession is only one alternative method for the third requirement.

Perfection under UCC Article 9 is the process by which a secured party makes its security interest effective against third parties. An attached security interest is enforceable against the debtor, but without perfection, the secured party may lose to competing creditors, lien creditors, or a bankruptcy trustee. Perfection methods include filing a financing statement, taking possession of collateral, or taking control of certain types of collateral. Perfection establishes priority in case of the debtor's default, bankruptcy, or competing claims. Answer A incorrectly conflates perfection with attachment (which makes the interest enforceable against the debtor). Answer C is incorrect because perfection requires additional steps beyond signing. Answer D is incorrect because there is no dollar threshold.

Under UCC Section 9-308(a), a security interest is perfected if it has attached and all applicable requirements for perfection have been satisfied. Perfection requires both attachment and the completion of the required perfection step (filing, possession, control, or automatic perfection for certain collateral). If attachment and perfection occur at the same time (such as when a PMSI is perfected on the day of sale), perfection occurs at that moment. Answer A (signing) triggers attachment if all conditions are met but may not complete perfection. Answer B (funding) gives value, completing one attachment requirement but not perfection. Answer C (debtor possession) is irrelevant to the timing of perfection.

Under UCC Section 9-317(a), an unperfected security interest is subordinate to: (1) a person who becomes a lien creditor before the interest is perfected (such as a judgment creditor who obtains a levy, or a bankruptcy trustee using strong-arm powers under 11 U.S.C. Section 544); and (2) under certain conditions, buyers of collateral who give value without knowledge of the security interest. This rule creates strong incentives to promptly perfect security interests. Answer A is incorrect because knowledge of an unperfected interest does not protect it against lien creditors. Answer C is incorrect because the unperfected interest also loses to lien creditors, not just other secured parties. Answer D is incorrect because the amount of value is irrelevant to this priority rule.

Under UCC Section 9-324(b), a PMSI in inventory achieves super-priority only if: (1) the PMSI is perfected before the debtor receives possession of the inventory; AND (2) the PMSI holder gives authenticated notification to any holder of a conflicting security interest in the same inventory before the debtor receives possession. The notification must state that the PMSI holder has or expects to acquire a PMSI in described inventory. This requirement protects existing accounts receivable lenders who rely on inventory as collateral - they are warned about new inventory financing. Answer B describes the rule for non-inventory goods, not inventory. Answer C is incorrect because additional requirements apply. Answer D is incorrect because no court order is required.

Under UCC Section 9-315, when collateral is disposed of, the security interest continues in identifiable proceeds. Proceeds include whatever is received upon the sale, exchange, collection, or other disposition of collateral - cash, checks, accounts, other property. Under Section 9-315(d), the security interest in proceeds is automatically perfected for 20 days. After 20 days, perfection continues without a new filing if: (1) a filed financing statement covers the original collateral and the proceeds are collateral in which a security interest may be perfected by filing in the same office; or (2) the proceeds are identifiable cash proceeds. Answer A is incorrect because the interest continues in proceeds. Answer B too narrowly limits proceeds to cash. Answer D describes what happens to a buyer who takes free of the security interest under Section 9-320, which is a different rule.

Under UCC Section 9-320(a), a buyer in the ordinary course of business takes free of a security interest created by the seller, even if the security interest is perfected and the buyer knows of its existence, as long as the buyer does not know that the purchase violates the security agreement. A BOCB must: (1) buy from a seller who is in the business of selling goods of that kind; (2) buy in good faith; and (3) not know that the sale violates the security interest. This rule protects retail customers who buy from merchants (protecting the normal flow of commerce). Answer A is incorrect because cash payment alone is insufficient. Answer B is incorrect because bankruptcy auctions are not in the ordinary course. Answer C is incorrect because the seller must be the debtor who created the security interest.

Under UCC Sections 9-312 and 9-314, a security interest in investment property may be perfected by: (1) filing a financing statement; or (2) taking control (which for certificated securities means taking possession with proper endorsement; for uncertificated securities means registering the secured party's interest; for securities accounts means an agreement with the securities intermediary). Control is the superior method - under Section 9-328, a security interest perfected by control has priority over one perfected only by filing. Answer B is incorrect because investment property is not automatically perfected. Answer C is incorrect because SEC filing is not an Article 9 perfection method. Answer D is partially correct (delivery is one form of control for certificated securities) but delivery alone without proper endorsement may be insufficient for control.

Under UCC Section 9-515, a financing statement is effective for five years from the date of filing. To continue perfection beyond five years, the secured party must file a continuation statement within the six-month period before the expiration. A timely continuation statement extends perfection for another five years from the original expiration date. If the secured party fails to file a continuation statement, perfection lapses and the security interest becomes unperfected. Answer A is incorrect because a five-year renewal is available. Answer C is incorrect because the filing's effectiveness is based on time, not debt repayment. Answer D is incorrect because termination statements are filed after the debt is paid to clear the record.

Under UCC Section 9-313, a security interest in tangible collateral may be perfected by possession. Types of collateral that can be perfected by possession include: goods, instruments (including promissory notes), negotiable documents of title, and certificated securities. For some collateral types (such as instruments), possession is actually a preferred method over filing because of the priority rules. Answer B is incorrect because Article 9 does not apply to real estate mortgages. Answer C is incorrect because electronic chattel paper is perfected by control, not possession; deposit accounts are also perfected by control. Answer D is incorrect because accounts receivable and general intangibles are intangible property that cannot be possessed; they are typically perfected by filing.