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AFSB 151 FINAL EXAM ACTUAL EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 151 FINAL EXAM ACTUAL EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 151 FINAL EXAM ACTUAL EXAMQUESTIONS WITH 100% CORRECT
ANSWERS | VERIFIED | LATEST UPDATE
A financial guarantee differs from performance and fidelity
guarantees because it requires honesty, the ability to perform the
contract, and Correct Answer The 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 Correct Answer Exoneration
In an unlimited cosurety arrangement, the obligee can collect
Correct Answer The 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 Correct Answer Maintenance 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 Correct
Answer Subdivision 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? Correct Answer
Compliance-only bonds
,Under a public official bond guaranteeing the honesty of a
treasurer, Correct Answer He or she must account for the cash
that he or she holds while in office.
Because most bonds are "joint and several liability" documents,
the obligee can recover losses from Correct Answer The principal
or the surety, or from both.
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 Correct Answer An 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 Correct Answer A
plaintiff bond
The legally mandated hazardous waste facilities performance
bond Correct Answer Can 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 Correct Answer Is 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, Correct Answer The producer may
facilitate underwriter interviews to help determine the contractor's
experience in meeting past contractual obligations.
A contractor's percentage-of-completion estimates Correct
Answer Are 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 Correct Answer Bond 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? Correct Answer Participating 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? Correct Answer Identify 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? Correct Answer Fiduciary bonds
Producers of public official bonds serve themselves and their
prospective principals by Correct Answer Offering their services
in September after primary elections are over and the candidates
are known.
Staff underwriting activities generally include which one of the
following? Correct Answer Formulating underwriting policy
, In the protective phase of the bond underwriting decision,
indemnity is waived only for what type of bonds? Correct Answer
The 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. Correct Answer Omnibus 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 Correct Answer Spousal exemption
Generally, what type of individuals cause most public official bond
losses? Correct Answer Dishonest individuals
Courts often order attachment bonds to secure property when
who is within the court's jurisdiction? Correct Answer A
nonresident defendant
Sureties underwrite both attachment and replevin bonds similarly,
but they usually write replevin bonds Correct Answer More
quickly and for smaller amounts.
Which of the following bonds guarantee that buyers will pay
farmers or other sellers of goods? Correct Answer Merchandising
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? Correct Answer Surety
Which special characteristic related to fidelity bonds most directly
concerns the following statement?
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