CMCA PRACTICE EXAM
Complete the following sentence: a __________________ is a promise or
guarantee that parts, materials, or labor will last for a designated period of time.
a. prospective bidder's questionnaire
b. warranty
c. qualifications sheet
d. waiver of lien - ANSWERS-B
Which of the following contract provisions means that if the contractor's
employees, agents, or subcontractors damage any common or individual property
in the community while performing contracted work, the contractor agrees to
fully restore the property to its original condition?
a. indemnification
b. standard of performance
c. restoration
d. compensation - ANSWERS-C
Complete the following sentence: a ___________________ is a guarantee by a
surety (a third party) to protect the community association if the contractor fails
to perform or finish the work.
a. payment bond
b. default
,c. performance bond
d. waiver of lien - ANSWERS-C
True or false: the manager should sign all contracts on behalf of the community
association. - ANSWERS-F
Which of the following types of exposure to loss for a community association is
characterized by net losses that may involve a reduction in income or an increase
in operating expenses or both?
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss - ANSWERS-C
Which of the following demonstrates the risk control technique of exposure
avoidance?
a. a community association rule prohibiting the use of alcohol in the clubhouse
b. conducting weekly fire safety inspections where flammables are stored
c. contracting for landscape services
d. backing up all computer files and storing the backup files in a separate place -
ANSWERS-A
True or false: the insurance industry is unregulated at the state level. - ANSWERS-
F
,True or false: the Federal National Mortgage Association (FannieMae) has a direct
impact on community association insurance obligations. - ANSWERS-T
Which of the following is not a common insurance coverage and endorsement for
property exposures to loss?
a. commercial package policy (CPP) insurance
b. boiler and machinery insurance
c. flood insurance
d. hired and non-owned automobile liability insurance - ANSWERS-D
True or false: employers' liability insurance provides protection for claims made
by employees regarding sexual harassment or discrimination. - ANSWERS-T
Which terminology for the following homeowner policies is for a condominium or
cooperative unit owner?
a. HO-6
b. HO-4
c. HO-1
d. HO-2 - ANSWERS-A
True or false: the preservation of life and property are paramount concerns in any
insurance contract. - ANSWERS-T
, Each of the following legal courses specify management authority and
responsibilities for community associations except:
a. survey data
b. state statutes
c. community association governing documents
d. court decisions - ANSWERS-A
True or false: the basic authority in a community association lies with the
developer. - ANSWERS-F
Complete the following sentence: the board of directors in a community
association has a _____________ to act in the best interests and for the benefit of
the community as a whole.
a. bond
b. fiduciary duty
c. ballot
d. quorum - ANSWERS-B
True or false: the "business judgment rule" means that if a board has exercised
reasonable business judgment in making a decision, the court will generally not
consider the board negligent in its fiduciary duty. - ANSWERS-T
Complete the following sentence: a __________________ is a promise or
guarantee that parts, materials, or labor will last for a designated period of time.
a. prospective bidder's questionnaire
b. warranty
c. qualifications sheet
d. waiver of lien - ANSWERS-B
Which of the following contract provisions means that if the contractor's
employees, agents, or subcontractors damage any common or individual property
in the community while performing contracted work, the contractor agrees to
fully restore the property to its original condition?
a. indemnification
b. standard of performance
c. restoration
d. compensation - ANSWERS-C
Complete the following sentence: a ___________________ is a guarantee by a
surety (a third party) to protect the community association if the contractor fails
to perform or finish the work.
a. payment bond
b. default
,c. performance bond
d. waiver of lien - ANSWERS-C
True or false: the manager should sign all contracts on behalf of the community
association. - ANSWERS-F
Which of the following types of exposure to loss for a community association is
characterized by net losses that may involve a reduction in income or an increase
in operating expenses or both?
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss - ANSWERS-C
Which of the following demonstrates the risk control technique of exposure
avoidance?
a. a community association rule prohibiting the use of alcohol in the clubhouse
b. conducting weekly fire safety inspections where flammables are stored
c. contracting for landscape services
d. backing up all computer files and storing the backup files in a separate place -
ANSWERS-A
True or false: the insurance industry is unregulated at the state level. - ANSWERS-
F
,True or false: the Federal National Mortgage Association (FannieMae) has a direct
impact on community association insurance obligations. - ANSWERS-T
Which of the following is not a common insurance coverage and endorsement for
property exposures to loss?
a. commercial package policy (CPP) insurance
b. boiler and machinery insurance
c. flood insurance
d. hired and non-owned automobile liability insurance - ANSWERS-D
True or false: employers' liability insurance provides protection for claims made
by employees regarding sexual harassment or discrimination. - ANSWERS-T
Which terminology for the following homeowner policies is for a condominium or
cooperative unit owner?
a. HO-6
b. HO-4
c. HO-1
d. HO-2 - ANSWERS-A
True or false: the preservation of life and property are paramount concerns in any
insurance contract. - ANSWERS-T
, Each of the following legal courses specify management authority and
responsibilities for community associations except:
a. survey data
b. state statutes
c. community association governing documents
d. court decisions - ANSWERS-A
True or false: the basic authority in a community association lies with the
developer. - ANSWERS-F
Complete the following sentence: the board of directors in a community
association has a _____________ to act in the best interests and for the benefit of
the community as a whole.
a. bond
b. fiduciary duty
c. ballot
d. quorum - ANSWERS-B
True or false: the "business judgment rule" means that if a board has exercised
reasonable business judgment in making a decision, the court will generally not
consider the board negligent in its fiduciary duty. - ANSWERS-T
