AFSB 152 PRACTICE EXAM A CORE FINANCIAL
SERVICES AND BANKING PRINCIPLES REVIEW
2026
◉ Which one of the following correctly describes a contractor's
responsibility for workmanship or materials after completion of a
contract?
- The contractor has no responsibility for workmanship or materials
after a contract is completed.
- The contractor under implied warranty is responsible for
workmanship or materials for a reasonable time after a contract has
been completed.
- The contractor, unless there is an express warranty with a time
limit, is responsible indefinitely for workmanship or materials after
a contract has been completed.
- The contractor is responsible for workmanship or materials after a
contract is completed only if there is an express warranty clause..
Answer: The contractor under implied warranty is responsible for
workmanship or materials for a reasonable time after a contract has
been completed.
◉ If a general indemnity agreement covers joint ventures,
- The surety's rights are limited to the indemnity agreement's
parties.
,- The surety's rights extend to all parties to the joint venture.
- The agreement automatically extends to the surety's reinsurers.
- Each surety can rely on its general indemnity agreements..
Answer: The surety's rights are limited to the indemnity
agreement's parties.
◉ Lido Roofing's work is generally subject to an implied warranty.
Which one of the following statements is correct regarding an
implied warranty for a roofing contractor?
- It typically applies for a 20-year period.
- It begins with the purchase of the materials.
- It does not begin until installation is completed.
- It includes coverage for excessive wear and tear..
Answer: It does not begin until installation is completed.
◉ Which one of the following is correct regarding the contractor's
risk in a cost-plus contract?
- The contractor's risk in a cost-plus contract is higher than it would
be in a fixed-price contract.
- There is more risk in a cost-plus contract than in a unit-price
contract.
- Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
,- The "plus" in a cost-plus contract is a fixed amount and is not
related to the contractor's risk..
Answer: Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
◉ KB Contracting entered a firm fixed-price contract to build a new
location for Mullen Markets. The construction contract includes a
bonus clause. Under this arrangement, KB Contracting will most
likely earn an incentive if it does which one of the following?
- Completes the job at a cost at least 5% below the original bid price.
- Completes the job with exceptional savings in both cost and time.
- Completes the work with exemplary quality.
- Completes the work within the prescribed period of time..
Answer: Completes the work within the prescribed period of time.
◉ Wilson Contracting was awarded a large federal construction
project. The Miller Act requires a contractor on a federal project to
post
- A performance bond and a labor and material payment bond.
- A labor and material payment bond only.
- A performance bond only.
- A bond covering state liens..
Answer: A performance bond and a labor and material payment
bond.
, ◉ When estimating the costs for labor, in addition to the capabilities
of the available labor force, the estimator must be familiar with
- Union and local regulations that might affect what work a
particular subcontractor can perform
- The subcontractor's hours of operation and overtime guidelines
- Any union labor limitations for specialized laborers who work on
private construction projects
- The profit margins that are customary for similar types of jobs in
the market.
Answer: Union and local regulations that might affect what work a
particular subcontractor can perform
◉ Which one of these statements most accurately describes the laws
and regulations with which architects must comply?
- A. Architects must comply with all federal, state, and local laws,
regulations, ordinances, requirements, and codes that apply to
construction projects
- Architects must comply with all federal, state, and local laws,
regulations, ordinances, requirements, and codes, as well as with
regulations and licensing requirements of the architectural
profession
- Architects must comply with regulations and licensing
requirements of the architectural profession, along with regulations
and licensing requirements for the construction firms
SERVICES AND BANKING PRINCIPLES REVIEW
2026
◉ Which one of the following correctly describes a contractor's
responsibility for workmanship or materials after completion of a
contract?
- The contractor has no responsibility for workmanship or materials
after a contract is completed.
- The contractor under implied warranty is responsible for
workmanship or materials for a reasonable time after a contract has
been completed.
- The contractor, unless there is an express warranty with a time
limit, is responsible indefinitely for workmanship or materials after
a contract has been completed.
- The contractor is responsible for workmanship or materials after a
contract is completed only if there is an express warranty clause..
Answer: The contractor under implied warranty is responsible for
workmanship or materials for a reasonable time after a contract has
been completed.
◉ If a general indemnity agreement covers joint ventures,
- The surety's rights are limited to the indemnity agreement's
parties.
,- The surety's rights extend to all parties to the joint venture.
- The agreement automatically extends to the surety's reinsurers.
- Each surety can rely on its general indemnity agreements..
Answer: The surety's rights are limited to the indemnity
agreement's parties.
◉ Lido Roofing's work is generally subject to an implied warranty.
Which one of the following statements is correct regarding an
implied warranty for a roofing contractor?
- It typically applies for a 20-year period.
- It begins with the purchase of the materials.
- It does not begin until installation is completed.
- It includes coverage for excessive wear and tear..
Answer: It does not begin until installation is completed.
◉ Which one of the following is correct regarding the contractor's
risk in a cost-plus contract?
- The contractor's risk in a cost-plus contract is higher than it would
be in a fixed-price contract.
- There is more risk in a cost-plus contract than in a unit-price
contract.
- Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
,- The "plus" in a cost-plus contract is a fixed amount and is not
related to the contractor's risk..
Answer: Cost-plus contracts expose the contractor to little or no risk
because costs are reimbursed.
◉ KB Contracting entered a firm fixed-price contract to build a new
location for Mullen Markets. The construction contract includes a
bonus clause. Under this arrangement, KB Contracting will most
likely earn an incentive if it does which one of the following?
- Completes the job at a cost at least 5% below the original bid price.
- Completes the job with exceptional savings in both cost and time.
- Completes the work with exemplary quality.
- Completes the work within the prescribed period of time..
Answer: Completes the work within the prescribed period of time.
◉ Wilson Contracting was awarded a large federal construction
project. The Miller Act requires a contractor on a federal project to
post
- A performance bond and a labor and material payment bond.
- A labor and material payment bond only.
- A performance bond only.
- A bond covering state liens..
Answer: A performance bond and a labor and material payment
bond.
, ◉ When estimating the costs for labor, in addition to the capabilities
of the available labor force, the estimator must be familiar with
- Union and local regulations that might affect what work a
particular subcontractor can perform
- The subcontractor's hours of operation and overtime guidelines
- Any union labor limitations for specialized laborers who work on
private construction projects
- The profit margins that are customary for similar types of jobs in
the market.
Answer: Union and local regulations that might affect what work a
particular subcontractor can perform
◉ Which one of these statements most accurately describes the laws
and regulations with which architects must comply?
- A. Architects must comply with all federal, state, and local laws,
regulations, ordinances, requirements, and codes that apply to
construction projects
- Architects must comply with all federal, state, and local laws,
regulations, ordinances, requirements, and codes, as well as with
regulations and licensing requirements of the architectural
profession
- Architects must comply with regulations and licensing
requirements of the architectural profession, along with regulations
and licensing requirements for the construction firms
