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AFSB 153 EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 153 EXAM QUESTIONS WITH 100% CORRECT ANSWERS | VERIFIED | LATEST UPDATE
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AFSB 153 EXAM QUESTIONS WITH 100%CORRECT ANSWERS | VERIFIED | LATEST
UPDATE
Which one of the following SAA classifications of license and
permit bonds do sureties consider the most hazardous?
a. Compliance bond with third-party liability
b. Reclamation and environmental protection bonds
c. Forfeiture bonds
d. Merchandising and dealer bonds Correct Answer b.
Reclamation and environmental protection bonds
When should an underwriter require collateral for license and
permit bonds?
a. When the underwriter is certain that the principal will default on
the bond obligation
b. After the principal has defaulted on the bond obligation
c. When the principal presents a higher-than-average risk of
default on the bond obligation
d. When the principal fails to meet all underwriting requirements
Correct Answer c. When the principal presents a higher-than-
average risk of default on the bond obligation
When might a court interpret bond language to include lawyers'
fees that exceed the bond penalty when combined with other
damages (excess awards)?
a. Courts routinely allow lawyers' fees as excess awards when
bond cases are tried.
b. Bond language prohibits courts from ever allowing excess
awards.
c. Courts often allow lawyers' fees as excess awards in bond
claims presented by damaged third parties.
d. Courts sometimes allow excess awards to punish a surety for
bad faith or unfair claim settlement practices. Correct Answer d.
,Courts sometimes allow excess awards to punish a surety for bad
faith or unfair claim settlement practices.
Packers and Stockyards Act bonds are designed to protect
a. Livestock sellers.
b. The public.
c. Packers and stockyard operations.
d. State governments. Correct Answer a. Livestock sellers.
A seller is required to give written notice of a claim on a Packers
and Stockyards Act bond. What is the effect if the seller fails to
give written notice to the packer and the Secretary of Agriculture
within thirty days of the missed payment due date?
a. If a bankruptcy ensues or the princpal fails to pay, the livestock
seller receives payment only after the other creditors.
b. If the livestock seller's claim against the trust is denied, it loses
its right to file a claim against the bond.
c. If a banktruptcy ensues or the principal fails to pay, the
livestock seller loses its right to file a claim against the trust.
d. If the trust fund does not adequately cover the livestock seller's
claim, it loses its right to file a claim against the bond. Correct
Answer c. If a banktruptcy ensues or the principal fails to pay, the
livestock seller loses its right to file a claim against the trust.
All of the following are strip mining bond provisions, EXCEPT:
a. Specification of a method of extraction
b. Procedures and provisions for bond forfeiture, release, or
discharge
c. Enforcement remedies specified by law, including forfeiture
procedure
d. Public notification of a reclamation plan Correct Answer d.
Public notification of a reclamation plan
Which one of the following is most beneficial to producers of retail
services and professional license bonds?
,a. Personal experience in the business or profession to be
bonded
b. Local knowledge of the area, the key people (reputations and
successes or failures), and the true values of the business
property
c. A college degree in business, with emphasis in the business or
profession to be bonded
d. None of the above Correct Answer b. Local knowledge of the
area, the key people (reputations and successes or failures), and
the true values of the business property
A party that functions as in intermediary who arranges the
shipment of goods by motor carrier for interstate or foreign
commerce is a(n)
a. Transportation broker.
b. Independent auctioneer.
c. Bureau of Land Management agent.
d. Federal warehouseman. Correct Answer a. Transportation
broker.
Which one of the following explains why some tobacco tax bonds
are particularly risky for sureties to write?
a. The ATF requires all tobacco manufacturers and distributors to
attend special classes on submitting taxes and reporting sales.
b. Tobacco is grown in certain parts of the country and is often
imported and exported.
c. Some states require that tobacco distributor bonds provide
indemnity to third parties that are injured as a result of tobacco
sales.
d. Tobacco tax bonds often contain onerous forfeiture provisions.
Correct Answer c. Some states require that tobacco distributor
bonds provide indemnity to third parties that are injured as a
result of tobacco sales.
, State warehouse laws have no effect on federally licensed
warehouses because
a. They vary from state to state, and the federal government
requires uniformity.
b. Federal warehouse laws preempt state laws.
c. Federal warehouses have options other than bonds for
providing assurance.
d. State warehouses handle smaller volumes than federal
warehouses. Correct Answer b. Federal warehouse laws
preempt state laws.
Which one of the following statements is true concerning
depository guidelines?
a. If the government establishes depository guidelines, the surety
must deposit funds according to those guidelines for the payment
of future bond losses.
b. Depository guidelines dictate the minimum deposit that a
principal can make into an account on any given day.
c. A bank establishes depository guidelines for public officials to
ensure that the officials do not abuse their money-handling
privileges.
d. If the principal does not follow depository guidelines and the
bank in which the principal deposited funds fails, the surety is
liable. Correct Answer d. If the principal does not follow
depository guidelines and the bank in which the principal
deposited funds fails, the surety is liable.
An underwriter can verify a public official bond applicant's integrity
and background by
a. Examining the official's education and experience.
b. Examining the financial statements and credit references for
demonstrated financial responsibility and positive net worth.
c. Reviewing records of the official's job performance in a related
job or business over an extended time period.
d. All of the above Correct Answer d. All of the above
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