1
,Surety analyst Bill Haywood is using the 10-step process to analyze Johnson Construction
Company for trending and forecasting using its financial statements and other relevant sources
of information. Which one of the following will be one of Bill's last steps to be done?
Select one:
A. Looking at status reports for open jobs as of the analyzed dates
B. Assessing owner Jim Johnson as to his appropriate business practices and standards
C. Assessing the cash or capital position of the company
D. Making financial comparisons using the company's financial statements - ANSWER-B
Jason is a branch-office underwriter. Jason is responsible for Select
one:
A. Analyzing and interpreting contractors' financial underwriting information but refering
any nonfinacial information to the home office for a final underwriting decision.
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,B. Making underwriting decisions for handling contractors' bonding needs on projects
larger than those the contractor has completed in the past.
C. Appealing home-office underwriting decisions to decline bond requests when it is clear
that the best decision has been made.
D. Keeping the contractor and producer informed of the bonding company's ability to serve
the contractor's bonding needs. - ANSWER-D
Which one of the following is an advantage of the takeover option?
Select one:
A. The surety must collect funds from the obligee as the work progresses.
B. The obligee may forgive a delay or liquidated damages.
C. The surety must complete the contract irrespective of cost.
D. The surety waives the penal sum of its performance bond as a defense. - ANSWER-B
Marla is a claims representative with Wilson Sureties gathering information needed for claims
relating to Greyson Enterprises. As part of this process, which one of the following best
describes Marla's activities in her official capacity?
Select one:
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, A. Marla conducts a review of the individual and corporate indemnitors' financial
condition, doing this after evaluating the principal's own financial condition.
B. Marla's most extensive and time-consuming component of gathering information for the
surety occurs at each of the principal's project sites.
C. Marla begins her investigation by meeting with each of the principal's lenders, including
the principal's bank, to get their financial assessments of the principal before contacting the
principal.
D. Marla contacts the principal's subcontractors and suppliers, especially appropriate when
the principal has requested financial assistance. - ANSWER-A
Which one of the following correctly describes the effect on payment of subcontractors when
there is a pay-when-paid clause in a construction contract?
Select one:
A. This clause has no effect on payment of subcontractors.
B. This clause allows the prime contractor to withhold payment to subcontractors for
nonpayment by the project owner.
C. This clause requires a subcontractor to be paid as soon as the subcontractor finishes work.
D. This clause gives the prime contractor reasonable time to collect from the owner before
payment to the subcontractor. - ANSWER-D
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,Surety analyst Bill Haywood is using the 10-step process to analyze Johnson Construction
Company for trending and forecasting using its financial statements and other relevant sources
of information. Which one of the following will be one of Bill's last steps to be done?
Select one:
A. Looking at status reports for open jobs as of the analyzed dates
B. Assessing owner Jim Johnson as to his appropriate business practices and standards
C. Assessing the cash or capital position of the company
D. Making financial comparisons using the company's financial statements - ANSWER-B
Jason is a branch-office underwriter. Jason is responsible for Select
one:
A. Analyzing and interpreting contractors' financial underwriting information but refering
any nonfinacial information to the home office for a final underwriting decision.
2
,B. Making underwriting decisions for handling contractors' bonding needs on projects
larger than those the contractor has completed in the past.
C. Appealing home-office underwriting decisions to decline bond requests when it is clear
that the best decision has been made.
D. Keeping the contractor and producer informed of the bonding company's ability to serve
the contractor's bonding needs. - ANSWER-D
Which one of the following is an advantage of the takeover option?
Select one:
A. The surety must collect funds from the obligee as the work progresses.
B. The obligee may forgive a delay or liquidated damages.
C. The surety must complete the contract irrespective of cost.
D. The surety waives the penal sum of its performance bond as a defense. - ANSWER-B
Marla is a claims representative with Wilson Sureties gathering information needed for claims
relating to Greyson Enterprises. As part of this process, which one of the following best
describes Marla's activities in her official capacity?
Select one:
3
, A. Marla conducts a review of the individual and corporate indemnitors' financial
condition, doing this after evaluating the principal's own financial condition.
B. Marla's most extensive and time-consuming component of gathering information for the
surety occurs at each of the principal's project sites.
C. Marla begins her investigation by meeting with each of the principal's lenders, including
the principal's bank, to get their financial assessments of the principal before contacting the
principal.
D. Marla contacts the principal's subcontractors and suppliers, especially appropriate when
the principal has requested financial assistance. - ANSWER-A
Which one of the following correctly describes the effect on payment of subcontractors when
there is a pay-when-paid clause in a construction contract?
Select one:
A. This clause has no effect on payment of subcontractors.
B. This clause allows the prime contractor to withhold payment to subcontractors for
nonpayment by the project owner.
C. This clause requires a subcontractor to be paid as soon as the subcontractor finishes work.
D. This clause gives the prime contractor reasonable time to collect from the owner before
payment to the subcontractor. - ANSWER-D
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