AFSB 151 STUDY EXAMS GUIDE QUESTIONS
AND ANSWERS SURE A+
✔✔Judicial bonds - ✔✔A. Are a category of court bonds that arise out of litigation and
are posted by persons seeking or appealing a remedy in court.
✔✔One type of fiduciary bond is required of an individual who has the legal
responsibility for the care of a minor or a legally incompetent person or for such a
person's property. This bond is called - ✔✔D. A guardians bond.
✔✔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 - ✔✔B. A plaintiff bond.
✔✔The legally mandated hazardous waste facilities performance bond - ✔✔D. Can be
posted only for hazardous waste facilities with permits, and it requires an underwriting
review of the closure plan.
✔✔Which one of these statements is true regarding financial guaranty bonds? - ✔✔B.
When in place, the entire issue of these bonds would have a higher investment grade,
allowing municipalities to sell their bonds at a lower interest rate.
✔✔Which one of these statements is true about lost securities bonds? - ✔✔C. The
security owner signs an affidavit describing the lost security and explaining how it
became lost and completes a bond application with an indemnity agreement.
✔✔Which one of these types of miscellaneous bonds guarantees that the principal will
establish and fund a trust or will provide alternative financial insurance? - ✔✔B.
Hazardous waste facilities financial guarantee bonds
,✔✔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 - ✔✔B. Maintenance bond.
✔✔Which one of these statements provides an accurate description of license and
permit bonds or their use? - ✔✔C. Licenses help regulate license holders through
statutes, regulations, or ordinances, and they are backed by license and permit bonds.
✔✔Under a public official bond guaranteeing the honesty of a treasurer, - ✔✔C. He or
she must account for the cash that he or she holds while in office.
✔✔Which type of contract bond guarantees that the principal will enter into a contract
and will provide the required bonds if the bid is accepted? - ✔✔C. Bid bond
✔✔Under a bid bond, if the bid is accepted and the principal refuses to enter into the
contract or fails to provide the additional required bonds, subject to the penal amount of
thebond, the obligee is generally entitled to be paid - ✔✔The difference between the
amount of the principal's bid and the next lowest bid the obligee finally accepts.
✔✔The Miller Act was passed to require principals, in addition to furnishing a
performance bond, to furnish a separate payment bond guaranteeing payment of all
bills incurred by the contractor - ✔✔For labor and materials at the project completion for
all federal jobs.
✔✔Bonds under this classification guarantee that the principal will properly account for
and remit government funds collected as required.
Which license and permit bond classification is described? - ✔✔D. Tax or fee bonds
✔✔This classification of license and permit bonds guarantees that the principal will
conduct specific business activities according to the law and protect the public from
misrepresentation or fraudulent practices by the seller. Which of the following
classification of license and permit bonds is described? - ✔✔Merchandising and dealer
bonds
✔✔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? - ✔✔Compliance-only bonds.
✔✔Public official bonds for officials who handle public funds - ✔✔A government entity
and in which the official or employee should deposit public funds.
, ✔✔The court requires a fiduciary who is named in a will to administer an estate to file a
type of fiduciary bond. This fiduciary is called - ✔✔B. An executor.
✔✔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 - ✔✔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 - ✔✔A plaintiff bond.
✔✔Judicial bonds - ✔✔Are a category of court bonds that arise out of litigation and are
posted by persons seeking or appealing a remedy in court.
✔✔The principal on a hazardous waste bond - ✔✔Is an owner or operator of a
hazardous waste facility and is responsible for closure and postclosure care of the
facility.
✔✔What type of miscellaneous bond do sureties often write as open penalty forms to
provide for fluctuation of the value of the subject of the bond? - ✔✔A lost security bond
✔✔The legally mandated hazardous waste facilities performance bond - ✔✔Can be
posted only for hazardous waste facilities with permits, and it requires an underwriting
review of the closure plan.
✔✔Which one of these statements is true regarding financial guaranty bonds? -
✔✔When in place, the entire issue of these bonds would have a higher investment
grade, allowing municipalities to sell their bonds at a lower interest rate
✔✔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 - ✔✔Subdivision
✔✔Which one of these accurately reflects a characteristic of license and permit bonds?
- ✔✔C. A license and permit bond frequently must be furnished to the appropriate public
entity by those who need licenses or permits.
✔✔In this public official category of bonds, sureties pay losses when subordinates in the
principal's office cause them, as well as when the principal causes them. This described
category of bonds - ✔✔D. Is officials who handle public funds, and the principals are
charged with honesty and faithful performance of duty while handling money as required
by law.
AND ANSWERS SURE A+
✔✔Judicial bonds - ✔✔A. Are a category of court bonds that arise out of litigation and
are posted by persons seeking or appealing a remedy in court.
✔✔One type of fiduciary bond is required of an individual who has the legal
responsibility for the care of a minor or a legally incompetent person or for such a
person's property. This bond is called - ✔✔D. A guardians bond.
✔✔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 - ✔✔B. A plaintiff bond.
✔✔The legally mandated hazardous waste facilities performance bond - ✔✔D. Can be
posted only for hazardous waste facilities with permits, and it requires an underwriting
review of the closure plan.
✔✔Which one of these statements is true regarding financial guaranty bonds? - ✔✔B.
When in place, the entire issue of these bonds would have a higher investment grade,
allowing municipalities to sell their bonds at a lower interest rate.
✔✔Which one of these statements is true about lost securities bonds? - ✔✔C. The
security owner signs an affidavit describing the lost security and explaining how it
became lost and completes a bond application with an indemnity agreement.
✔✔Which one of these types of miscellaneous bonds guarantees that the principal will
establish and fund a trust or will provide alternative financial insurance? - ✔✔B.
Hazardous waste facilities financial guarantee bonds
,✔✔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 - ✔✔B. Maintenance bond.
✔✔Which one of these statements provides an accurate description of license and
permit bonds or their use? - ✔✔C. Licenses help regulate license holders through
statutes, regulations, or ordinances, and they are backed by license and permit bonds.
✔✔Under a public official bond guaranteeing the honesty of a treasurer, - ✔✔C. He or
she must account for the cash that he or she holds while in office.
✔✔Which type of contract bond guarantees that the principal will enter into a contract
and will provide the required bonds if the bid is accepted? - ✔✔C. Bid bond
✔✔Under a bid bond, if the bid is accepted and the principal refuses to enter into the
contract or fails to provide the additional required bonds, subject to the penal amount of
thebond, the obligee is generally entitled to be paid - ✔✔The difference between the
amount of the principal's bid and the next lowest bid the obligee finally accepts.
✔✔The Miller Act was passed to require principals, in addition to furnishing a
performance bond, to furnish a separate payment bond guaranteeing payment of all
bills incurred by the contractor - ✔✔For labor and materials at the project completion for
all federal jobs.
✔✔Bonds under this classification guarantee that the principal will properly account for
and remit government funds collected as required.
Which license and permit bond classification is described? - ✔✔D. Tax or fee bonds
✔✔This classification of license and permit bonds guarantees that the principal will
conduct specific business activities according to the law and protect the public from
misrepresentation or fraudulent practices by the seller. Which of the following
classification of license and permit bonds is described? - ✔✔Merchandising and dealer
bonds
✔✔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? - ✔✔Compliance-only bonds.
✔✔Public official bonds for officials who handle public funds - ✔✔A government entity
and in which the official or employee should deposit public funds.
, ✔✔The court requires a fiduciary who is named in a will to administer an estate to file a
type of fiduciary bond. This fiduciary is called - ✔✔B. An executor.
✔✔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 - ✔✔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 - ✔✔A plaintiff bond.
✔✔Judicial bonds - ✔✔Are a category of court bonds that arise out of litigation and are
posted by persons seeking or appealing a remedy in court.
✔✔The principal on a hazardous waste bond - ✔✔Is an owner or operator of a
hazardous waste facility and is responsible for closure and postclosure care of the
facility.
✔✔What type of miscellaneous bond do sureties often write as open penalty forms to
provide for fluctuation of the value of the subject of the bond? - ✔✔A lost security bond
✔✔The legally mandated hazardous waste facilities performance bond - ✔✔Can be
posted only for hazardous waste facilities with permits, and it requires an underwriting
review of the closure plan.
✔✔Which one of these statements is true regarding financial guaranty bonds? -
✔✔When in place, the entire issue of these bonds would have a higher investment
grade, allowing municipalities to sell their bonds at a lower interest rate
✔✔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 - ✔✔Subdivision
✔✔Which one of these accurately reflects a characteristic of license and permit bonds?
- ✔✔C. A license and permit bond frequently must be furnished to the appropriate public
entity by those who need licenses or permits.
✔✔In this public official category of bonds, sureties pay losses when subordinates in the
principal's office cause them, as well as when the principal causes them. This described
category of bonds - ✔✔D. Is officials who handle public funds, and the principals are
charged with honesty and faithful performance of duty while handling money as required
by law.
