The Federal Trade Commission (FTC) Takes the Position That

question 79

Multiple Choice

The Federal Trade Commission (FTC) takes the position that

• A)consumers cannot distinguish between factual information and puffery.
• B)puffery has a detrimental effect on consumers' purchase decisions.
• C)consumers recognize puffery and don't believe it.
• D)puffery is illegal under the Wheeler-Lea Act.
• E)consumers believe in puffery.

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Definitions:

Preemptive Right

A shareholder’s option to purchase new issuances of shares in proportion to the shareholder’s current ownership of the corporation.

Model Business Corporation Act

A set of model laws prepared to assist states in drafting legislation to regulate the formation and operation of corporations.

Articles of Incorporation

The primary document required to register a corporation with a state, detailing the fundamental aspects of the company, such as its name, purpose, and structure.

Share Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.