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Precisely. Transceivers transmit and receive signals simultaneously. When a node sends data, the transmitting circuitry of the transceiver places the data bits on the medium. Simultaneously, the transceiver’s receiving circuitry listens to the transmission. If what is heard is the same as what was sent, then everything is fine. If not, the transceiver presumes that an error has occurred and notifies the node of this condition. (This error is called a “collision,” which is discussed in Chapter 8.) In a nutshell, a transceiver essentially does three functions: it sends data, it receives data, and it notifies its host node if an error condition has occurred during a transmission. (Note: In Ethernet V2.0, a transceiver performs a fourth function: it asserts signal quality error (SQE). This is discussed in Chapter 8.)