Assignment 5 Practice Exam Questions
The information that the surety underwriter organizes for the background investigation of a principal
includes - ANSPublic information, including the principal's legal filings, such as lawsuits, judgements, tax
liens, bankruptcies, reorganizations, and Uniform Commercial Code filings.
As a surety underwriter, Peter must evaluate documents and information that is provided by the
principal. Which one of the following documents could alert Peter of questionable assets or cash flow
problems? - ANSAge of accounts reports
Which one of the following is a true statement regarding the North American Industry Classification
System (NAICS)? - ANSThe NAICS provide business classification codes along with trade line
classifications, which indicate business products or services.
Johnny started baking and selling bread out of his home on weekends. His business was doing well, so
he decided to buy a truck and expand the business to include deliveries to a few local restaurants. After
two years, Johnny was struggling to stay on top of his bills and needed to reorganize. Which one of the
following chapters of the Bankruptcy Reform Act allows small business owners to repay creditors over a
period of time and retain possession of their assets? - ANSChapter 13
Which one of the following includes sections of the Consumer Credit Protection Act that apply directly
to the surety industry? - ANSTitles VI and VII
Which one of the following identifies the government entity that has added specific requirements to
meet the guidelines set out under Regulation B and provides explanations and clarifications? - ANSThe
Federal Reserve Board
Which one of the following statements is true regarding the surety underwriter's evaluation of a surety
principal? - ANSThe underwriter needs to obtain current information quickly or risk making a bad
decision on broad-based or outdated information.
Which one of the following statements is true regarding the principal as a source of underwriting
information for bonding? - ANSThe principal is the primary source of direct information, including
identification, historical, management, financial, bank, and performance information.
The information that the surety underwriter organizes for the background investigation of a principal
includes - ANSPublic information, including the principal's legal filings, such as lawsuits, judgements, tax
liens, bankruptcies, reorganizations, and Uniform Commercial Code filings.
As a surety underwriter, Peter must evaluate documents and information that is provided by the
principal. Which one of the following documents could alert Peter of questionable assets or cash flow
problems? - ANSAge of accounts reports
Which one of the following is a true statement regarding the North American Industry Classification
System (NAICS)? - ANSThe NAICS provide business classification codes along with trade line
classifications, which indicate business products or services.
Johnny started baking and selling bread out of his home on weekends. His business was doing well, so
he decided to buy a truck and expand the business to include deliveries to a few local restaurants. After
two years, Johnny was struggling to stay on top of his bills and needed to reorganize. Which one of the
following chapters of the Bankruptcy Reform Act allows small business owners to repay creditors over a
period of time and retain possession of their assets? - ANSChapter 13
Which one of the following includes sections of the Consumer Credit Protection Act that apply directly
to the surety industry? - ANSTitles VI and VII
Which one of the following identifies the government entity that has added specific requirements to
meet the guidelines set out under Regulation B and provides explanations and clarifications? - ANSThe
Federal Reserve Board
Which one of the following statements is true regarding the surety underwriter's evaluation of a surety
principal? - ANSThe underwriter needs to obtain current information quickly or risk making a bad
decision on broad-based or outdated information.
Which one of the following statements is true regarding the principal as a source of underwriting
information for bonding? - ANSThe principal is the primary source of direct information, including
identification, historical, management, financial, bank, and performance information.
