Instructions: Look at the explanations provided for each answer--whether correct or not--to make sure you understand all aspects of the question and its implication. You can learn a lot from the explanations of the wrong answers.
A security interest in a certificated security may be perfected without filing a financing statement or taking possession of the certificate that evidences the security.
TRUE
FALSE
A security interest in a certificated security in registered form may be perfected by possession of the certificate that evidences the security only if it is accompanied by an effective indorsement (but no indorsement is needed in the case of a certificated security in bearer form).
TRUE
FALSE
An interest in a partnership or in a limited liability company that is evidenced by a certificate must be investment property within the meaning of Revised Article 9.
TRUE
FALSE
An interest in a corporation or in a business trust that is evidenced by a certificate must be investment property within the meaning of Revised Article 9.
TRUE
FALSE
A financing statement filed to perfect an interest in investment property of a debtor sufficiently describes the collateral if it simply states that it covers all personal property of the debtor.
TRUE
FALSE
The law of the jurisdiction where an issuer of a certificated security is organized governs the perfection of a security interest in the certificated securities issued by that issuer by possession.
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FALSE
A person obtains control over a certificated security in registered form by obtaining possession of the certificate evidencing the security.
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FALSE
If a person obtains control over a certificated security, then that person will have the status of a protected purchaser and will take the security free of adverse claims.
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FALSE
Article 8 of the Uniform Commercial Code governs the creation and perfection of a security interest in certificated securities.
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FALSE
Article 8 of the Uniform Commercial Code governs transfers of interests in securities and does not apply to security interests in securities.
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FALSE
An indorsement signed by a corporate officer at a closing remains an effective indorsement only until that corporate officer leaves the corporation, whether by resignation, death, retirement or otherwise, and then it lapses.
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FALSE
An effective indorsement need not appear on the security certificate itself but may appear on a separate piece of paper.
TRUE
FALSE
Dividends paid on a security are not proceeds from the security unless the underlying security is sold or transferred.
TRUE
FALSE
A security agreement used to create a security interest in certificated securities must be in writing or other tangible or physical form if the secured party intends to rely solely on filing a financing statement to perfect its security interest.
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FALSE
An interest in a limited liability company is a financial asset when held through a securities account whether or not its organizational documents state that the interest is a security governed by Article 8.
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FALSE
Unless the secured party signs a subordination agreement as a condition to obtaining control over a securities account, the security interest of a broker in a securities account is junior to the security interest of a secured party that has control over the securities account. The broker typically will require such a subordination agreement prior to giving the secured party control over the account.
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FALSE
A secured party may have control over a securities account even if the debtor retains the right to give the securities intermediary instructions with respect to the account (including instructions to transfer all investment positions to another account or liquidate the positions in the account and transfer the proceeds to the debtor).
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FALSE
A stock power must be attached, clipped or stapled to a stock certificate for the stock power to constitute an effective indorsement to the certificate.
TRUE
FALSE
A tractor or other item of farming equipment may constitute a financial asset if a securities intermediary agrees to hold the asset for a customer through a securities account that it maintains for the customer.
TRUE
FALSE
Any transferee of a security from a protected purchaser obtains its interest free and clear of adverse claims just as the protected purchaser acquired its interest free of adverse claims.