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AFSB 152 FINAL EXAM ACTUAL EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 152 FINAL EXAM ACTUAL EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 152 FINAL EXAM ACTUAL EXAMQUESTIONS WITH 100% CORRECT
ANSWERS | VERIFIED | LATEST UPDATE
Which one of the following best describes the right of the obligee
when the principal fails to perform the contract?
Select one:
A. The obligee has a right to use contract funds to complete the
performance of the contract.
B. The obligee has the right to find another surety underwriter.
C. The obligee has the right to cancel the contract.
D. The obligee has the right to renegotiate the terms of the
contract. Correct Answer A. The obligee has a right to use
contract funds to complete the performance of the contract.
Which one of the following is generally not a covered expense
under a Miller Act labor and material payment bond?
Select one:
A. Wages
B. Insurance premiums
C. Contributions to union pension funds
D. Materials used in the work Correct Answer B. Insurance
premiums
What is the guideline used by a surety to review a balance sheet
Correct Answer fair market value
,All of the following are examples of consequential damages that
an obligee may claim against a surety, EXCEPT:
Select one:
A. The obligee's premature release of securities
B. Interest on the cost of completion
C. Lost profits
D. The obligee's attorneys' fees Correct Answer A. The obligee's
premature release of securities
To meet the definition of salvage, assets must be liquid with a
fixed and determined value (T/F) Correct Answer F
Which one of the following expenses is generally included as part
of a surety's case expense reserves?
Select one:
A. The surety's reinsurance cost
B. The ending incurred but not reported (IBNR) provision minus
paid losses
C. Accountants' fees and expenses
D. Premium paid by the principal Correct Answer C. Accountants'
fees and expenses
Who executes a performance bond Correct Answer the surety
,The tender preparation stage of estimating begins after... Correct
Answer the architect and owner solicit bids, when the contractors
begin their estimating processes
To find clarity on payment bond terms, you can... Correct Answer
consult the applicable and relatively stable case law that does
define the terms
A surety needs additional information, such as _____________,
to adequately evaluate the work-backlog risk of granting this bond
Correct Answer the contractor's overall capacity and financial
capacity
The Schedule of __________ is one of the most important
schedules used by producers and underwriters when analyzing a
contractor's financial statement Correct Answer construction in
progress
A potential problem a project owner could encounter when using
a design/build contractor is that government requirements may
require a seal on the plans from a professional engineer or a
registered architect, and the design/build contractor may not have
a designer on staff (T/F) Correct Answer T
The design/build contractor charges a separate design fee in
addition to the construction overhead and profit (T/F) Correct
Answer F
You can recognize a small companies tax method by looking at
their balance sheet (T/F) Correct Answer T
Vast majority of small contractors use one method for both tax
reporting and financial reporting Correct Answer F
, Bid bonds may not contain specific penal sums or bond penalties
(T/F) Correct Answer T
Through a sharing clause in a construction contract, the
___________ is responsible for cost overruns, and the
_________ are responsible cost underruns Correct Answer
contractor
owner and contractor
An obligation of the principal in a bid bond that is not a manuscript
bid bond form is that it must... Correct Answer furnish
performance and payment bonds with an acceptable surety
Hazardous waste bond underwriters can protect the surety from
exposure to third-party liability outside the protection of the bond
penalty by... Correct Answer ensuring that the bond does not
require the surety to finance the principal or to engage a
completing contractor
The three tasks that can determine whether the contractor can
successfully perform the work are... Correct Answer estimating,
planning, and managing the work to be performed
So that the underwriter can evaluate the contractor's completed
jobs, work programs, and experience, the principal should
provide: Correct Answer Type, size, and location of work
Largest previous backlog
Profitability
Set-aside programs were developed to... Correct Answer assist
minority-owned, disadvantaged, or women-owned business
enterprises
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