On October 1, Karl purchased a big-screen television from Circuit City so that he and his friends could watch football games at his home each Sunday. Karl granted Circuit City a security interest in the television to secure its purchase price, which was to be paid in installments to Circuit City. Circuit City never filed a financing statement.

On November 1, Karl took out a loan from Bank and gave them a security interest in his car and the television that he purchased on October 1 from Circuit City. The bank perfected its security interest by filing a financing statement on the same day (and by having its lien noted on the title certificate for the car).

Does Circuit City or Bank have priority in the television?

1. Bank has priority because it was the first to file under the “first to file or perfect” rule.

2. Circuit City has priority because its security interest in the television is a purchase money security interest.

3. Circuit City has priority because it was the first to perfect under the “first to file or perfect” rule.

4. Both 2 & 3