Deck 30: Conducting Business in Cyberspace

Question 1

Firms that conduct business on the Web are subject to the same legal restrictions as are the traditional brick-and-mortar firms.

Answer 1

True

Question 2

Frequently,offers on Web sites include a button to be clicked by the user with his or her mouse that indicates acceptance.Clicking the button does not necessarily denote that the offer has been accepted.

Answer 2

False

Question 3

It has become quite popular for people to download music from the Web onto digital storage devices.

Answer 3

True

Question 4

It is important to note that trading in the stock of the firm by company officials is also called insider trading,but as long as it is reported,it is not illegal.

Question 5

Use taxes are extremely difficult to collect on small items sold on the Web,and most states do not make efforts to collect use taxes.

Question 6

The computer user can verify a digital signature using an encrypted code that is registered with the government.

Question 7

The Securities Exchange Commission ensures that prospective investors have access to full and correct information about the company's securities in which they are interested in purchasing.

Question 8

There is no requirement for corrective advertising under the FTC,and hence,it does not inform Web page visitors if the previous information was deceptive.

Question 9

Issuers of securities must register the securities with the:

A) U.S. Copyright Commission.
B) U.S. Patent and Trademark Office.
C) Securities and Exchange Commission.
D) Federal Trade Commission.

Question 10

The Web,or cyberspace,is also considered a place,and securities are regularly bought and sold electronically.

Question 11

A place where a corporation or an issuer sells its securities to the public is known as a:

A) commodity market.
B) primary market.
C) secondary market.
D) labor market.

Question 12

The Securities Act of 1933 covers the sale of securities (stock,bonds,and other forms of investments)in the:

A) primary market.
B) secondary market.
C) consumer market.
D) labor market.

Question 13

The Securities Exchange Commission acts to make certain that investors do not violate the Securities Exchange Commission's anti-touting rules.

Question 14

The issuing company may not provide prospective investors with a prospectus.

Question 15

Words like e-business,e-tailing,e-marketing,and e-contracts found their way into the English vocabulary,and companies started taking the Internet seriously as an important new means of doing business.

Question 16

A document that provides relevant and important information about the company,its businesses,and its prospects is known as:

A) memorandum of association.
B) articles of association.
C) letters of incorporation.
D) prospectus.

Question 17

The rightful owners of music often have granted permission and receive royalties from pirated music; they have not made any efforts to stop companies from distributing music online.

Question 18

It is expensive to proceed against a defendant in a court case; a person who is the victim of a breach of contract will frequently seek to have the dispute resolved using alternative means.

Question 19

It is not a mandate under the Securities Exchange Act of 1934 for companies to periodically release important business information to the public and to investors.

Question 20

In 1992,the SEC created a computerized system,known as the Electronic Data Gathering,Analysis,and Retrieval (EDGAR)system that allows companies to:

A) download required information directly.
B) sell its shares to the public online.
C) make advertisements on the web.
D) register with the Federal Trade Commission.

Question 21

The following are the advantages of alternative disputes resolution system,EXCEPT:

A) speedy disposal.
B) privacy.
C) finality.
D) publicity.

Question 22

An advertisement that contains an important misrepresentation,omission,or practice likely to mislead a consumer who acts reasonably under the circumstances is known as a(n):

A) adversarial propaganda.
B) descriptive advertisement.
C) deceptive advertisement.
D) prejudiced opinion.

Question 23

When a person who has confidential information about a particular company purchases shares of the company's stock with the intention of selling these shares for a higher price when the information is released to the general public,then it is known as:

A) touting.
B) churning.
C) buffering.
D) insider trading.

Question 24

In documents pertaining to wills,codicils,and related testamentary papers,ESIGN does not apply to electronic:

A) transaction details.
B) symbols.
C) signatures.
D) witnesses.

Question 25

If the Web site visitor has had an ample opportunity to read the terms of an agreement,and if those terms are not unreasonable,a(n):

A) void contract exists.
B) voidable contract exists.
C) valid contract exists.
D) unenforceable contract exists.

Question 26

The thing that is extremely difficult to collect on small items sold on the Web,and most states do not make efforts to collect,is:

A) income tax.
B) use tax.
C) corporation tax.
D) property tax.

Question 27

A system in which contract disputes and other disagreements are resolved by using means other than a lawsuit is known as an:

A) alternative dispute resolution.
B) environmental dispute resolution.
C) employment dispute resolution.
D) Internet dispute resolution.

Question 28

The Securities Exchange Act of 1934 covers the trading of these same securities in the _____________,defined as the place where one member of the public sells securities to another member of the public.

A) primary market
B) secondary market
C) consumer market
D) labor market

Question 29

The federal Digital Millennium Copyright Act of 1998 (DMCA)provides that Internet Service Providers are not liable for copyright infringements by their subscribers if they adopt and reasonably implement a(n):

A) purchase policy.
B) terminating policy.
C) sales policy.
D) insurance policy.

Question 30

In recent years,it has become quite popular for people to trade and download music and other forms of entertainment (movies,games,etc.)from the Web onto compact disks and other digital storage devices.The legal issue associated with this is:

A) copyright infringement.
B) patent infringement.
C) trademark infringement.
D) service mark infringement.

Question 31

.This link or tie is referred to as (a):

A) proximate.
B) levying.
C) nexus.
D) touting.

Question 32

The electronic contracts containing electronic signatures are just as enforceable as those that are printed on paper is a statement made by a federal statute called as the:

A) Sherman Antitrust Act of 1890.
B) Global Anti-Semitism Review Act of 2004.
C) Digital Millennium Copyright Act of 1998.
D) Electronic Signatures in Global and National Commerce Act of 2000.

Question 33

The federal agency responsible for ensuring that advertising in the United States is truthful is the:

A) Securities and Exchange Commission.
B) Federal Trade Commission.
C) Federal Maritime Commission.
D) State Maritime Commission.

Question 34

In 1998,an act was passed by the Congress which established a moratorium on taxing ISPs on the services they provide to computer users.This act was called:

A) Digital Millennium Copyright Act.
B) Securities Exchange Act.
C) Statute of Fraud.
D) Internet Tax Freedom Act.

Question 35

The illegal activity of using insider information for personal gain is considered a(n):

A) manipulative and deceptive practice.
B) honest approach.
C) practice of forgery.
D) mandatory civil rights encroachment.

Question 36

A state wishing to collect a sales tax must levy the tax on a:

A) buyer who resides within the state.
B) seller who resides within the state.
C) middleman who resides within the state.
D) distributor who resides within the state.

Question 37

The Federal Trade Commission can issue a(n)____________,in effect compelling the publisher to eliminate the Internet reference.

A) restraining order
B) garnishee order
C) interim order
D) cease-and-desist order

Question 38

When an investor who owns shares of a company's stock posts notices online-in chat rooms,on Web pages,on blogs,and elsewhere-that indicate that the value of the stocks will increase,then such an act is known as:

A) cyber squatting.
B) churning.
C) touting.
D) insider trading.

Question 39

Means of Alternative Dispute Resolution include:

A) counseling and analysis.
B) mediation and arbitration.
C) preliminary and prohibitory injunction.
D) temporary and permanent injunction.

Question 40

A period of time during which no state may levy sales taxes on Internet Service Providers is known as a:

A) tallage.
B) scutage.
C) moratorium.
D) ad valorem.

Question 41

Describe the Digital Millennium Copyright Act.

Question 42

Explain the role of the Federal Trade Commission (FTC),and the options it has regarding deceptive advertisements.

Question 43

List the six key settings in which the law applies to conducting business on the Web.