Which of the following is true of a certificated security?
A) Its ownership is recorded only on the books of the issuer.
B) A bearer security is not a certificated security.
C) It cannot be transferred by negotiation.
D) It is dealt in on securities exchanges.

Question

Quizplus · Accepted Answer

A certificated security is a physical document that represents ownership of a security, such as a stock or bond. These securities can be bought and sold on securities exchanges, making option D the correct answer. Option A is incorrect because ownership is also recorded on the books of the transfer agent and can be verified through the Depository Trust Company. Option B is incorrect because a bearer security can be certificated or uncertificated, meaning it can be in physical form or not, while option C is incorrect because certificated securities can be transferred by negotiation.

Which of the Following Is True of a Certificated Security