Surety Bond Basics Quiz

Surety Bond Basics Quiz In accordance with a contract to build a county shed for the Village of Malcom, Raymone Construction purchases a contract surety bond from SureRite Insurance. Identify the principal, obligee, and surety in this suretyship. Select one: A. Principal--Raymone Construction; obligee--Village of Malcom; Surety--SureRite Insurance B. Principal--SureRite Insurance; obligee--Raymone Construction; Surety--Village of Malcom C. Principal--Village of Malcom; obligee--Raymone Construction; Surety--SureRite Insurance D. Principal--Village of Malcom; obligee--SureRite Insurance; Surety--Raymone Construction - ANS A. Principal--Raymone Construction; obligee--Village of Malcom; Surety--SureRite Insurance Bonds for which the laws specify the bond conditions and for which all three parties are dictated by the applicable law rather than the bond provisions are Select one: A. Financial guarantee bonds. B. Statutory bonds. C. Fidelity bonds. D. Nonstatutory bonds. - ANS B. Statutory bonds are those for which the laws specify the bond conditions and for which all three parties are dictated by the applicable law rather than the bond provisions. A basic type of bond that involves all situations in which sureties guarantee performance of obligations that generally do not arise from contracts is Select one: A. Nonstatutory bonds. B. Commercial surety bonds. C. Fidelity surety bonds. D. Contract surety bonds. - ANS B. Commercial surety bonds involve all situations in which sureties guarantee performance of obligations that generally do not arise from contracts Bonds that are required by business entities and individuals to protect them from loss, and for which the obligation is dictated by the contract between the principal and the obligee and by the bond provisions, are Select one: A. Commercial surety bonds. B. Fiduciary bonds. C. Nonstatutory bonds. D. Statutory bonds. - ANS C. Nonstatutory bonds. A surety bond is a written document in which one party guarantees a second party's Select one: A. Answer to a third party for the second party's failure to resolve the third party's deficiency. B. Performance to a third party for the second party's failure to fulfill an obligation. C. Payment to a third party for the second party's failure to earn enough funds to repay the third party. D. Satisfaction to a third party for the second party's failure to provide the requested collateral. - ANS B. A surety bond is a written document in which one party guarantees a second party's performance to a third party for the second party's failure to fulfill an obligation.