AFSB 151 Ch.1 Practice Exam 2023 with 100% correct answers

A surety bond is a written document in which one party guarantees a second party's - correct answer Performance to a third party for the second party's failure to fulfill an obligation 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 - correct answer Statutory bonds An organization that uses its collected data to calculate loss costs that member company underwriters use to determine premium for risks is - correct answer The Surety and Fidelity Association of America (SFAA) Which one of the following characteristics is unique under American personal suretyship compared with corporate suretyship? - correct answer Sureties were protected by laws that were favorable to them In the surety bond three-party relationship, the party who is primarily responsible for fulfilling the obligation and who typically has control of the obligation is the - correct answer Principal 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 - correct answer Surety 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 - correct answer According to the contract, plans, and specifications; at the agreed price and within the time allowed Under a public official bond guaranteeing the honesty of a treasurer, - correct 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? - correct answer Licenses help regulate license holders through statutes, regulations, or ordinances, and they are backed by license and permit bonds The two basic types of surety bonds that are written today are - correct answer Contract surety bonds and commercial surety bonds