AFSB 153 Exam Questions and Answers
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Customs Bond - guarantees that tariffs and duties will paid and that the
principal will abide by customs laws and regulations
What is another name for surety? - guarantor
What does an investment grade determine for a principals...
Customs Bond - ✔✔guarantees that tariffs and duties will paid and that the
principal will abide by customs laws and regulations
What is another name for surety? - ✔✔guarantor
What does an investment grade determine for a principals credit rating? -
✔✔interest rate
Broker - ✔✔main point of contact for a principal in working with a surety
they start the dialogue with the surety
negotiate the rate and indemnity agreement
collateral requirements
help establish a single and aggregate program limit for your account
-they have access to multiple sureties and they will help the principal find
the right product for the right price based on the principals needs and
financial situation
Why are governments so interested in surety bonds? - ✔✔they want to
protect the public and safeguard our tax dollars
,What local government entities require surety bonds? - ✔✔city
township
county
local court
water authority
What state government entities require surety bonds? - ✔✔transportation
and general services departments
courts
departments of environmental protection
What federal government entities require surety bonds? - ✔✔military-
Department of Defense, Veterans Affairs, Customs
bureau
court
distinct classes of bonds - ✔✔contract
court
license and permit
federal and public officials
miscellaneous
Most difficult bonds to write - ✔✔advanced payment
,defendants appeal
pure financial guarantee
Easiest bonds to write - ✔✔performance and payments
supply
license and permit
customs
Examples of License and Permit bonds - ✔✔blasting, handling and
explosives
travel agencies
real estate brokers
employment agencies
motor vehicle dealers
plumbers
electrician
plaintiffs bond - ✔✔person bringing the legal action, it protects against
damages to the defendant that result from the legal action filed by the
plaintiff
defendants bond - ✔✔counteracting the effect of the plaintiffs bond and
guaranteeing the payment of damages should the plaintiff win the case
, -permit the defendant to regain control of property seized in litigation
-guarantees payment if the judgment favors the plaintiff
injunction bond - ✔✔requires the party to do something or refrain from
doing something
it can be difficult to convince a surety to write these bonds
decedent - ✔✔deceased person
trustee - ✔✔the person named to hold the property in trust for the trust's
beneficiaries
executor - ✔✔person named by the will to handle the estate of the
decedent
-appointed by a testator
-court must approve the appointed person
administrator - ✔✔a person appointed by the court to handle the estate of
the decedent
trustee in bankruptcy - ✔✔someone named by the court to administer a
bankrupt estate for the benefit of the estate and creditors
How much are bid bond amounts? - ✔✔5 to 20 percent of the bid amount
How much are performance and payment bond amounts? - ✔✔generally
for 100 percent of the contract amount but they can be for lower amounts
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