Delivering Stock to a Creditor as Security for a Debt

question 20

Multiple Choice

Delivering stock to a creditor as security for a debt owed by the shareholder:

• A) transfers ownership rights.
• B) gives rise to a perfected security interest.
• C) makes the creditor a perfected party after filing.
• D) makes the debtor a perfected party after filing.

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Definitions:

Legal Right

A legally enforced entitlement or permission recognized by law.

Negotiable

Legally transferable from one person to another.

Agency's Fee

A charge or payment made to an agency for its services, typically a percentage of the contract value.

Voucher Checks

A type of check that includes vouchers detailing the reason for the payment, often used by businesses for record-keeping purposes.