AFSB 151 Practice Exam Questions With 100% Correct Answers.
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Course
AFSB 151
Institution
AFSB 151
AFSB 151 Practice Exam Questions With 100% Correct Answers.
Which one of the following characteristics is unique under American personal suretyship compared with corporate suretyship?
Sureties were protected by laws that were favorable to them
Except in the case of a forfeiture bond, if the pr...
AFSB 151 Practice Exam Questions With 100%
Correct Answers.
Which one of the following characteristics is unique under American personal
suretyship compared with corporate suretyship?
Sureties were protected by laws that were favorable to them
Except in the case of a forfeiture bond, if the principal defaults the surety will pay
Up to the bond penalty, but no more than the obligee's actual loss amount
CB Construction entered into a construction contract with Lee Properties. The
contract required that CB Construction obtain a performance bond, with Lee
Properties named as the obligee. Performance bonds guarantee that the obligee
will be indemnified for any loss resulting from the principal's failure to perform
the work
According to the contract, plans, and specifications; at the agreed price; and within the
time allowed
Which of the following groups, for the most part, serves the market for fidelity
and surety bonds in the United States?
Multiline property-casualty insurers
Which one of the following is an example of a third-party beneficiary on a given
bond?
An heir on a fiduciary executory bond
Bonds under this classification guarantee that the principal will properly account
for and remit government funds collected as required. Which license and permit
bond classification is described?
Tax or fee bonds
The two basic types of surety bonds that are written today are
Contract surety bonds and commercial surety bonds
A basic type of bond that involves all situations in which sureties guarantee
performance of obligations that generally do not arise from contract is
Commercial surety bonds
When evaluating a surety claim, claims representatives are often assisted by
outside legal counsel. Which one of the following other professionals often assist
claims representatives?
Engineers
The surety bond three-party relationship, the party who guarantees fulfillment of
the obligation and who will either perform the obligation or pay the costs for its
fulfillment is the
Surety
Paul has the legal responsibility for the care for his brother, who is a legally
incompetent person, and for his brother's property. Paul is required to obtain a
bond that guarantees he will exercise his duties faithfully and account for all
property received. This bond is called
A fiduciary bond
,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
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
Statutory bonds
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
Unless the cosureties limit their respective liabilities in a bond, when two or more
cosureties execute a bond with the same principal, their liability to the obligee is
Joint and several
A group that educates the general public, legislative bodies, contractor
associations, and others about the benefits of surety bonds is
The National Association of Surety Bond Producers (NASBP)
A surety's liability for a surety bond can only cease to exist when the underlying
obligation/agreement has
Been performed as specified in the contract or when the bond has been canceled
Because most bonds are "joint and several liability" documents, the obligee can
recover losses from
The principal or the surety, or from both
The Miller Act was passed to require principals, in addition to furnishing a
performance bond, to furnish a separate payment bond guaranteeing payment of
all bills incurred by the contractor
For labor and materials at the project completion for all federal jobs
Judicial bonds
Are a category of court bonds that arise out of litigation and are posted by persons
seeking or appealing a remedy in court
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
In accordance with a contract to build a county shed for the Village of Malcolm,
Raymone Construction purchases a contract surety bond from SureRite
Insurance. Identify the principal, obligee, and surety in this suretyship.
Principal- Raymone Construction; obligee- Village of Malcolm; Surety- SureRite
Insurance
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
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?
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
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
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?
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?
A power of attorney
Following the Civil War, the growing number of complexity of
financial/commercial relationships led to the need for
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
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
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?
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?
Corporate suretyship
An organization that uses its collected data to calculate loss costs that member
company underwriters use to determine premiums for risks is
The Surety and Fidelity Association of America (SFAA)
Under a public official bond guaranteeing honestly of a treasurer
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?
Licenses help regulate license holders through statutes, regulations, or ordinances, and
they are backed by license and permit bonds
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