AFSB 151 Practice Exam Questions with
100% Correct Answers | Graded A+
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
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,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
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,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)
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, 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
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
100% Correct Answers | Graded A+
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
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,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
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,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)
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, 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
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
