Picasso, tired of creating, opens an art supplies store. Picasso enters into a security agreement with Monet on January 1, and Monet filed a financing statement on January 5. The security agreement provided Monet with a security interest in Picasso’s entire inventory, both existing and after-acquired, and the financing statement covered all of Picasso's inventory.

On March 1, Picasso purchased 50 gallons of blue paint from Dali under an installment contract. Under the contract, Dali retained a security interest in the blue paint to secure Picasso’s payment. Dali perfected that interest by filing that same day.

Meanwhile on March 10, thinking blue paint was a tired trend, Picasso sold Matisse the blue paint, which he delivered that day. Matisse paid Picasso in cash the following week.

Which of the following is true about the cash Picasso received from Matisse?

1) Monet has priority over Dali, because Monet was first to file.

2) Dali has priority over Monet, as long as Dali sent an authenticated notification to Monet informing Monet that Dali was taking a purchase money security interest in Picasso’s blue paint and as long as Monet received the notification before Picasso acquired the blue paint.

3) Monet has priority over Dali, because Dali's purchase money priority in the blue paint does not extend to proceeds of the blue paint.

4) Dali has priority over Monet, because Dali had a perfected purchase-money security interest in the blue paint.