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AFSB 151 Final Exam 2024/2025 already graded A+
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AFSB 151 Final Exam 2024/2025 already graded A+
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AFSB 151 Final ExamA surety bond is a written document in which one party guarantees a second party's -
ANSPerformance to a third party for the second party's failure to fulfill an obligation.
Which one of the these groups, for the most part, serves the market for fidelity and surety bonds
in the United States? - ANSMultiline property-casualty insurers
Sureties use what written document to authorize a producer to act as the surety's agent in bond
production? - ANSA power of attorney
While suretyship and banking both use a prequalification process to extend credit to their
customers, suretyship is different from bank credit in that - ANSSuretyship guarantees
performance as well as monetary obligations.
Because most bonds are "joint and several liability" documents, the obligee can recover losses
from - ANSThe principal or the surety, or from both.
A financial guarantee differs from performance and fidelity guarantees because it requires
honesty, the ability to perform the contract, and - ANSThe ability to pay money to meet the
contractual obligation.
A legal remedy that a surety can use against a defaulting bond principal, in which the surety
exercises its right to force the principal to perform by exhausting the principal's resources
instead of its own, is - ANSExoneration
In an unlimited cosurety arrangement, the obligee can collect - ANSThe full loss from any of the
cosureties up to the penal sum of the bond.
A bond that guarantees that faulty work will be corrected and defective materials will be
replaced for a period of one year or less and that is usually provided with a performance bond at
no additional cost is a - ANSMaintenance bond
A contract bond that guarantees the local governmental authority that a principal will complete a
development in accordance with approved proposals and at the principal's expense is a -
ANSSubdivision bond
This classification of license and permit bonds poses the least risk to the surety and guarantees
that the principal will conform with laws that govern the business or activity it conducts.
Which bond classification is described? - ANSCompliance-only bonds
,Under a public official bond guaranteeing the honesty of a treasurer, - ANSHe or she must
account for the cash that he or she holds while in office.
Bond losses occur when a fiduciary and its surety are held accountable because the fiduciary
did not exercise reasonable care in notifying all heirs of an impending probate proceeding. This
fiduciary is called - ANSAn administrator
A person who commences an action against another to obtain an equitable remedy may be
required to post a bond before the court will proceed with the action. This bond is called - ANSA
plaintiff bond
The legally mandated hazardous waste facilities performance bond - ANSCan be posted only
for hazardous waste facilities with permits, and it requires an underwriting review of the closure
plan.
The principal on a hazardous waste bond - ANSIs an owner or operator of a hazardous waste
facility and is responsible for closure and postclosure care of the facility.
In the next step of the bond prequalification process, once the producer has compiled the
contractor's financial documents showing significant liquidity, - ANSThe producer may facilitate
underwriter interviews to help determine the contractor's experience in meeting past contractual
obligations.
A contractor's percentage-of-completion estimates - ANSAre based on the contractor's ability to
estimate the cost to complete the project and recognize income and profit as they accrue during
the project.
A $5 million/$20 million contract surety credit line means that the surety is willing to - ANSBond
single jobs up to a contract price of $5 million when the aggregate contract backlog does not
exceed $20 million.
Which one of the following statements is true regarding surety producers' promotion? -
ANSParticipating in professional seminars and construction industry associations is an excellent
way to communicate to a target audience.
When developing one aspect of the business plan, the planning group should consider their
agency's philosophy and culture, management quality and commitment, team motivation and
dedication, resources, and the continuity of ownership and management. Which one of the
following describes this aspect of the planning process? - ANSIdentify the agency's strengths
and weaknesses
Which one of these categories of court bonds is written primarily on the basis of an attorney's
character and reputation for trustworthiness? - ANSFiduciary bonds
, Producers of public official bonds serve themselves and their prospective principals by -
ANSOffering their services in September after primary elections are over and the candidates are
known.
Staff underwriting activities generally include which one of the following? - ANSFormulating
underwriting policy
In the protective phase of the bond underwriting decision, indemnity is waived only for what type
of bonds? - ANSThe smallest and least hazardous bonds
When a corporation has a number of subsidiaries that will all require bonds, what type of
agreement can be used that would allow the parent to provide indemnity for its current
subsidiaries and affiliates, as well as for companies it might acquire or form in the future. -
ANSOmnibus agreement
An example of a common addendum that might address a principal's concern about the
conditions of a general agreement of indemnity (GAI) is - ANSSpousal exemption
Generally, what type of individuals cause most public official bond losses? - ANSDishonest
individuals
Courts often order attachment bonds to secure property when who is within the court's
jurisdiction? - ANSA nonresident defendant
Sureties underwrite both attachment and replevin bonds similarly, but they usually write replevin
bonds - ANSMore quickly and for smaller amounts.
Which of the following bonds guarantee that buyers will pay farmers or other sellers of goods? -
ANSMerchandising and dealer bonds
Compliance bonds with third-party liability allow a direct right of action against which party for
damages a third party may suffer because of the principal's acts? - ANSSurety
Which special characteristic related to fidelity bonds most directly concerns the following
statement?
Many employers will not sign complaints or testify at criminal proceedings against their
employees. They often wish to avoid damaging publicity; accept employees' "hard luck" stories;
and wish to resolve matters quickly, especially when employees accused of theft promise
restitution or are valuable employees. - ANSManagement might be reluctant to prosecute
employee thefts.
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