AFSB 152 TEST 2026 CERTIFICATION
EVALUATION EXAMS COMPLETE QUESTIONS
AND ANSWERS
◉ In an unlimited cosurety arrangement, the obligee can collect
Answer: The full loss from any of the cosureties up to the penal sum
of the bond
◉ WP Hospitality hired Green Builders to build a new hotel. As part
of the contract, WP Hospitality required that Green Builders obtain a
surety bond to guarantee that it would pay all subcontractors for
their labor and materials. The payment bond was obtained from
Blue Surety. Which one of the following is a potential third-party
beneficiary in this surety relationship?
Answer: Subcontractors
◉ Under a bid bond, if the bid is accepted and the principal refuses
to enter into the contract or fails to provide the additional required
bonds, subject to the penal amount of the bond, the obligee is
generally entitled to be paid
Answer: The difference between the amount of the principal's bid
and the next lowest bid the obligee finally accepts
,◉ Public official bonds are written for principals who have
administrative duties but do not handle money and who
Answer: Include commissioners, assessors, judges, coroners, town
clerks, engineers, and auditors
◉ Ellen was planning a large family reunion at a local park. She
wanted to reserve the picnic tables, and have use of the restrooms at
the park. As a prerequisite to using the park, the township required
that Ellen obtain a commercial surety bond. Which one of the
following types of surety bonds would Ellen be required to obtain?
Answer: Permit bond
◉ Jennifer is a producer for Goshen Insurance Agency. She is also the
person at the agency responsible for selling and servicing surety
bonds. Which of the following written documents do sureties use to
authorize a producer to act as the surety's agent in bond
production?
Answer: A power of attorney
◉ Following the Civil War, the growing number of complexity of
financial/commercial relationships led to the need for
Answer: Corporate suretyship
,◉ In the surety bond three-party relationship who is primarily
responsible for fulfilling the obligation and who typically has control
of the obligation is the
Answer: Principal
◉ A bond that guarantees that faulty work will be corrected and
defective materials will be replaced for a period of one year or less
that is usually provided with a performance bond at no additional
cost is a
Answer: Maintenance bond
◉ In bonds under this classification, the surety pays the entire bond
penalty if the principal fails to complete the obligations. Which one
of the following bond classifications is described?
Answer: Forfeiture bonds
◉ Which one of the following developed in the United States to
guarantee the large amounts of money involved in the country's
industrial and commercial growth?
Answer: Corporate suretyship
◉ An organization that uses its collected data to calculate loss costs
that member company underwriters use to determine premiums for
risks is
Answer: The Surety and Fidelity Association of America (SFAA)
, ◉ Under a public official bond guaranteeing honestly of a treasurer
Answer: He or she must account for the cash that he or she holds
while in office
◉ Which one of the following statements provides an accurate
description of license and permit bonds or their use?
Answer: Licenses help regulate license holders through statutes,
regulations, or ordinances, and they are backed by license and
permit bonds
◉ The establishment of the formal contract between the surety,
principal, and obligee that is offered to the principal is called
Answer: Execution of a bond
◉ A pre-set surety bond credit limit
Answer: Eliminates the need to reevaluate the contractor's need for
every bond
◉ To reach a reasonable rate of return for their bond risks
Answer: Sureties pay competent underwriters and agents
competitive salaries and commissions
◉ A contractor's percentage-of-completion estimates
EVALUATION EXAMS COMPLETE QUESTIONS
AND ANSWERS
◉ In an unlimited cosurety arrangement, the obligee can collect
Answer: The full loss from any of the cosureties up to the penal sum
of the bond
◉ WP Hospitality hired Green Builders to build a new hotel. As part
of the contract, WP Hospitality required that Green Builders obtain a
surety bond to guarantee that it would pay all subcontractors for
their labor and materials. The payment bond was obtained from
Blue Surety. Which one of the following is a potential third-party
beneficiary in this surety relationship?
Answer: Subcontractors
◉ Under a bid bond, if the bid is accepted and the principal refuses
to enter into the contract or fails to provide the additional required
bonds, subject to the penal amount of the bond, the obligee is
generally entitled to be paid
Answer: The difference between the amount of the principal's bid
and the next lowest bid the obligee finally accepts
,◉ Public official bonds are written for principals who have
administrative duties but do not handle money and who
Answer: Include commissioners, assessors, judges, coroners, town
clerks, engineers, and auditors
◉ Ellen was planning a large family reunion at a local park. She
wanted to reserve the picnic tables, and have use of the restrooms at
the park. As a prerequisite to using the park, the township required
that Ellen obtain a commercial surety bond. Which one of the
following types of surety bonds would Ellen be required to obtain?
Answer: Permit bond
◉ Jennifer is a producer for Goshen Insurance Agency. She is also the
person at the agency responsible for selling and servicing surety
bonds. Which of the following written documents do sureties use to
authorize a producer to act as the surety's agent in bond
production?
Answer: A power of attorney
◉ Following the Civil War, the growing number of complexity of
financial/commercial relationships led to the need for
Answer: Corporate suretyship
,◉ In the surety bond three-party relationship who is primarily
responsible for fulfilling the obligation and who typically has control
of the obligation is the
Answer: Principal
◉ A bond that guarantees that faulty work will be corrected and
defective materials will be replaced for a period of one year or less
that is usually provided with a performance bond at no additional
cost is a
Answer: Maintenance bond
◉ In bonds under this classification, the surety pays the entire bond
penalty if the principal fails to complete the obligations. Which one
of the following bond classifications is described?
Answer: Forfeiture bonds
◉ Which one of the following developed in the United States to
guarantee the large amounts of money involved in the country's
industrial and commercial growth?
Answer: Corporate suretyship
◉ An organization that uses its collected data to calculate loss costs
that member company underwriters use to determine premiums for
risks is
Answer: The Surety and Fidelity Association of America (SFAA)
, ◉ Under a public official bond guaranteeing honestly of a treasurer
Answer: He or she must account for the cash that he or she holds
while in office
◉ Which one of the following statements provides an accurate
description of license and permit bonds or their use?
Answer: Licenses help regulate license holders through statutes,
regulations, or ordinances, and they are backed by license and
permit bonds
◉ The establishment of the formal contract between the surety,
principal, and obligee that is offered to the principal is called
Answer: Execution of a bond
◉ A pre-set surety bond credit limit
Answer: Eliminates the need to reevaluate the contractor's need for
every bond
◉ To reach a reasonable rate of return for their bond risks
Answer: Sureties pay competent underwriters and agents
competitive salaries and commissions
◉ A contractor's percentage-of-completion estimates
