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AFSB 151 Final Exam
Download now
Johns Hopkins University
HIGH YIELDS QUESTIONS
NEWEST MODEL 2026 EXAM LATEST
VERSION SOLVED QUESTIONS &
ANSWERS VERIFIED 100 %
Exam
AFSB 151 Final Exam
, Page 2 of 21
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.
Which one of the these groups, for the most part, serves the market for fidelity
and surety bonds in the United States?
Multiline property-casualty insurers
Sureties use what written document to authorize a producer to act as the
surety's agent in bond production?
A power of attorney
While suretyship and banking both use a prequalification process to extend
credit to their customers, suretyship is different from bank credit in that
Suretyship guarantees performance as well as monetary obligations.
Because most bonds are "joint and several liability" documents, the obligee
can recover losses from
The principal or the surety, or from both.
A financial guarantee differs from performance and fidelity guarantees
because it requires honesty, the ability to perform the contract, and
The ability to pay money to meet the contractual obligation.
A legal remedy that a surety can use against a defaulting bond principal, in
which the surety exercises its right to force the principal to perform by
exhausting the principal's resources instead of its own, is
Exoneration
In an unlimited cosurety arrangement, the obligee can collect
The full loss from any of the cosureties up to the penal sum of the bond.
A bond that guarantees that faulty work will be corrected and defective
materials will be replaced for a period of one year or less and that is usually
provided with a performance bond at no additional cost is a
Maintenance bond
A contract bond that guarantees the local governmental authority that a
principal will complete a development in accordance with approved proposals
and at the principal's expense is a
Subdivision bond
, Page 3 of 21
This classification of license and permit bonds poses the least risk to the
surety and guarantees that the principal will conform with laws that govern the
business or activity it conducts.
Which bond classification is described?
Compliance-only bonds
Under a public official bond guaranteeing the honesty of a treasurer,
He or she must account for the cash that he or she holds while in office.
Bond losses occur when a fiduciary and its surety are held accountable
because the fiduciary did not exercise reasonable care in notifying all heirs of
an impending probate proceeding. This fiduciary is called
An administrator
A person who commences an action against another to obtain an equitable
remedy may be required to post a bond before the court will proceed with the
action. This bond is called
A plaintiff bond
The legally mandated hazardous waste facilities performance bond
Can be posted only for hazardous waste facilities with permits, and it requires an
underwriting review of the closure plan.
The principal on a hazardous waste bond
Is an owner or operator of a hazardous waste facility and is responsible for closure
and postclosure care of the facility.
In the next step of the bond prequalification process, once the producer has
compiled the contractor's financial documents showing significant liquidity,
The producer may facilitate underwriter interviews to help determine the contractor's
experience in meeting past contractual obligations.
A contractor's percentage-of-completion estimates
Are based on the contractor's ability to estimate the cost to complete the project and
recognize income and profit as they accrue during the project.
A $5 million/$20 million contract surety credit line means that the surety is
willing to
Bond single jobs up to a contract price of $5 million when the aggregate contract
backlog does not exceed $20 million.
AFSB 151 Final Exam
Download now
Johns Hopkins University
HIGH YIELDS QUESTIONS
NEWEST MODEL 2026 EXAM LATEST
VERSION SOLVED QUESTIONS &
ANSWERS VERIFIED 100 %
Exam
AFSB 151 Final Exam
, Page 2 of 21
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.
Which one of the these groups, for the most part, serves the market for fidelity
and surety bonds in the United States?
Multiline property-casualty insurers
Sureties use what written document to authorize a producer to act as the
surety's agent in bond production?
A power of attorney
While suretyship and banking both use a prequalification process to extend
credit to their customers, suretyship is different from bank credit in that
Suretyship guarantees performance as well as monetary obligations.
Because most bonds are "joint and several liability" documents, the obligee
can recover losses from
The principal or the surety, or from both.
A financial guarantee differs from performance and fidelity guarantees
because it requires honesty, the ability to perform the contract, and
The ability to pay money to meet the contractual obligation.
A legal remedy that a surety can use against a defaulting bond principal, in
which the surety exercises its right to force the principal to perform by
exhausting the principal's resources instead of its own, is
Exoneration
In an unlimited cosurety arrangement, the obligee can collect
The full loss from any of the cosureties up to the penal sum of the bond.
A bond that guarantees that faulty work will be corrected and defective
materials will be replaced for a period of one year or less and that is usually
provided with a performance bond at no additional cost is a
Maintenance bond
A contract bond that guarantees the local governmental authority that a
principal will complete a development in accordance with approved proposals
and at the principal's expense is a
Subdivision bond
, Page 3 of 21
This classification of license and permit bonds poses the least risk to the
surety and guarantees that the principal will conform with laws that govern the
business or activity it conducts.
Which bond classification is described?
Compliance-only bonds
Under a public official bond guaranteeing the honesty of a treasurer,
He or she must account for the cash that he or she holds while in office.
Bond losses occur when a fiduciary and its surety are held accountable
because the fiduciary did not exercise reasonable care in notifying all heirs of
an impending probate proceeding. This fiduciary is called
An administrator
A person who commences an action against another to obtain an equitable
remedy may be required to post a bond before the court will proceed with the
action. This bond is called
A plaintiff bond
The legally mandated hazardous waste facilities performance bond
Can be posted only for hazardous waste facilities with permits, and it requires an
underwriting review of the closure plan.
The principal on a hazardous waste bond
Is an owner or operator of a hazardous waste facility and is responsible for closure
and postclosure care of the facility.
In the next step of the bond prequalification process, once the producer has
compiled the contractor's financial documents showing significant liquidity,
The producer may facilitate underwriter interviews to help determine the contractor's
experience in meeting past contractual obligations.
A contractor's percentage-of-completion estimates
Are based on the contractor's ability to estimate the cost to complete the project and
recognize income and profit as they accrue during the project.
A $5 million/$20 million contract surety credit line means that the surety is
willing to
Bond single jobs up to a contract price of $5 million when the aggregate contract
backlog does not exceed $20 million.
