Question 1

Transactions in virtual currency do not require financial institutions, and can be conducted anonymously. With these features of virtual currency in mind, the most ethical action a user can take is to

A) protect himself or herself.
B) avoid the use of virtual currency entirely.
C) use virtual currency exclusively.
D) take advantage of those who are not aware of how virtual currency is used.

A

Accepted Answer

As virtual currency transactions can be conducted anonymously and without the involvement of financial institutions, there is a higher risk of fraudulent activity and theft. Therefore, the most ethical action a user can take is to protect themselves by being cautious, relying on reputable platforms or exchanges, and following best practices for securing their virtual currency.

Question 2

A digital invoice is&#8203;&#10;A) &#8203;an electronic version of a paper bill that can be paid online.&#10;B) &#8203;an online view of a paper bill that cannot be paid online.&#10;C) &#8203;a statement for a subscription service that makes B2B payments.&#10;D) &#8203;a supplemental record of a transaction payment.

Accepted Answer

A digital invoice refers to an electronic version of a traditional paper bill that can be generated, sent, and paid online. It eliminates the need for paper-based billing methods and enables faster payments, easier tracking, and reduced errors.

Question 3

Businesses have been required to switch to digital invoices in&#8203;&#10;A) &#8203;the European Union.&#10;B) &#8203;the United States.&#10;C) &#8203;countries that host the Association of Financial Professionals.&#10;D) &#8203;the home regions of cloud-based companies.

Accepted Answer

The European Union has required businesses to switch to digital invoices in order to improve efficiency and reduce costs. This requirement has been in place since 2001 and is part of the EU's efforts to create a single market for goods and services.

Question 4

Apple Pay and other phone-based payment systems enable mobile devices to&#8203;&#10;A) &#8203;link from a digital wallet to another app within a single phone.&#10;B) &#8203;entail more security risks than carrying a physical wallet.&#10;C) &#8203;communicate wirelessly with point-of-sale systems.&#10;D) &#8203;work with existing magnetic-strip credit-card machines.

Accepted Answer

Apple Pay and other phone-based payment systems use Near Field Communication (NFC) technology to communicate wirelessly with point-of-sale systems, allowing the user to make contactless payments at the merchant's terminal without having to physically swipe a card or hand over cash. They do not work with existing magnetic-strip credit-card machines, as those machines require a physical card to be swiped. While there are potential security risks with any payment method, mobile payment systems generally offer enhanced security features such as tokenization and biometric authentication.

Question 5

Virtual currency is stored in a digital wallet and identified by public keys. To access virtual currency requires corresponding sequences of private keys. Unlike real currency, virtual currency is&#8203;&#10;A) &#8203;not issued or backed by any government or bank.&#10;B) &#8203;subject to special digital transaction fees.&#10;C) &#8203;risk-free.&#10;D) &#8203;required to be accepted in payment or exchange.

Accepted Answer

Virtual currency is not issued or backed by any government or bank, making it decentralized and independent of traditional financial systems.

Question 6

&#8203;Mobile payment and digital wallet services include Apple Pay, Google Wallet, and Samsung Pay. The ultimate goal of these payment systems is to&#10;A) &#8203;link from a digital wallet to another app within a single phone.&#10;B) &#8203;entail more security risks than carrying a physical wallet.&#10;C) &#8203;communicate wirelessly with point-of-sale systems.&#10;D) &#8203;work with existing magnetic-strip credit-card machines.

Accepted Answer

The answer of &#8203;Mobile payment and digital wallet services include...

Question 7

Virtual currency is a medium of exchange that operates like a currency in some environments. In other words, more precisely, virtual currency is&#8203;&#10;A) &#8203;digital money.&#10;B) &#8203;coins and bills.&#10;C) &#8203;checks, notes, and other negotiable instruments in paper form.&#10;D) &#8203;all of the choices.

Accepted Answer

Virtual currency is defined as digital money that is used as a medium of exchange in some environments. It is not physical currency like coins and bills, and it is not negotiable instruments in paper form like checks and notes. Therefore, the best choice is A) digital money.

Question 8

Virtual currency has legitimate uses. Laws that apply to virtual currency include all of the following except&#8203;&#10;A) &#8203;federal registration requirements.&#10;B) &#8203;state licensing requirements.&#10;C) &#8203;the proposed uniform Regulation of Virtual Currencies Act.&#10;D) &#8203;the Federal Deposit Insurance Corporation regulations.

Accepted Answer

The Federal Deposit Insurance Corporation (FDIC) regulates deposit insurance for banks and does not have any jurisdiction over virtual currencies. The other options are applicable to virtual currency laws and regulations.

Deck 56: Negotiable Instruments