CH 11

C

A man wanted to have a building erected at a competitive price, completed within a specified time, with workmanship guarantee for one year. Which bonds are required? Choose one answer. a. Bid Bond, Payment Bond, Supply Bond, and Permit Bond b. Performance Bond only c. Bid Bond, Performance Bond, Payment Bond, and Maintenance Bond d. Bid Bond, Performance Bond, Payment Bond, and Supply Bond

A

What are the three underwriting characteristics for bonds? Choose one answer. a. Character, capital, and capability b. Indemnitor, collateral, and joint control c. Indemnitor, financial ability, and capability d. Reputation, financial ability and Indemnitor

D

What is the difference between surety ship vs. insurance? Choose one answer. a. A surety bond, or surety ship, is one wherein the fulfilling of an obligation by one party to another is guaranteed by a third party, a three-party contract, rather than two parties (insurer and insured). b. Insurance policies are cancelable and nonrenewable; a surety bond is non-cancelable c. Insurance pays to or on behalf of insured; in surety ship the one making the guarantee is called upon to pay because of the default by the party who was performing the obligation. d. All of the answers are correct

C

Which bond guarantees delivery at an agreed price for purchasing goods from another? Choose one answer. a. Payment Bond b. Maintenance Bond c. Supply Bond d. Subdivision Bond

C

Which bond guarantees indemnification to the obligee for any losses resulting from the principal's failure to complete the contract work in accordance with specifications? Choose one answer. a. Bid Bond b. Payment Bond c. Performance Bond d. Maintenance Bond

B

Which bond guarantees that all labor and materials for the project will be paid by the contractor upon the completion of the work, which also guarantees there will be no mechanic's liens or similar problems after completion? Choose one answer. a. Maintenance Bond b. Payment Bond c. Bid Bond d. Performance Bond

B

Which bond guarantees the principal will be responsible after completion and acceptance to correct faulty work or replace defective materials? Choose one answer. a. Bid Bond b. Maintenance Bond c. Performance Bond d. Payment Bond

C

Which bond guarantees to a permitting authority that promised streets, sidewalks, sewers, streetlights and other required improvements would be installed? Choose one answer. a. Payment Bond b. Supply Bond c. Subdivision Bond d. Maintenance Bond

A

Which bond is required to accompany a bid for a contract which will require that the successful bidder furnish a further bond if awarded the job, and the bidder will enter into the contract and will satisfy further bonding requirements for the job? Choose one answer. a. Bid Bond b. Payment Bond c. Maintenance Bond d. Performance Bond

C

Which type of bond allows an issuing company to reissue a lost stock certificate, bond or similar instrument? Choose one answer. a. Customs Bond b. Blue Sky Bond c. Lost Instrument Bond d. Public Official Bond

A

Which type of fiduciary bond is designed for those who are appointed to manage and preserve property other than estates of decedents, such as those appointed as guardians of minors or incompetents? Choose one answer. a. Conservation Bond b. Court Bond c. Probate Bond d. Fiduciary Bond

B

Which type of fiduciary bond is required by persons appointed to conserve remaining assets and protect creditors? Choose one answer. a. Conservation Bond b. Insolvency Bond c. Probate Bond d. Court Bond

C

Who are the three parties to the surety ship? Choose one answer. a. Indemnitor, Principal, and Surety b. Contractor, Obligee, and Insured c. Principal, Obligee, and Surety d. Insured, Contractor, and Insurer

A

Under a Surety Bond, valuable property held by Surety for the life of the bond is called? Choose one answer. a. Collateral b. Principal c. Joint Venture d. Capital

C

Under what conditions would the bonding company usually require an indemnitor? Choose one answer. a. Collateral; if the bond contains a financial guarantee (a given amount at some date or on the happening of some contingency etc.) the surety may require that the bond be collateralized by deposit of cash or other valuable property. b. The greatest emphasis in surety ship is to provide a guarantee for the fulfillment of a contractual obligation, particularly, agreement for construction and for supplying goods. c. The surety satisfying itself that the principal has the capabilities to perform the obligation, but is lacking the necessary financial resources to carry it safely through to completion. d. The Surety will wish to satisfy itself on (1) the character of the principal (dependable reputation to warrant the surety's trust) (2) the principal's financial resources (capital) and (3) the experience or capabilities of the principal to perform.

A

Which type of bond is furnished by both the plaintiffs and defendants in litigation to protect the opposing party from loss in the event the principal fails to show a legal entitlement to the remedy sought? Choose one answer. a. Court Bond b. Conservation Bond c. Probate Bond d. Insolvency Bond

A

Which type of bond is one that guarantees the performance of a person appointed by a court, or named in a will or deed of trust to take possession of property, collect assets, make investments, pay debts, sell assets, carry on business, etc? Choose one answer. a. Fiduciary Bond b. Court Bond c. Bail Bond d. Probate Bond

C

Which type of bond is provided to the Department as evidence of compliance with state law and guaranteeing financial responsibility to respond to obligations? Choose one answer. a. Blue Sky Bond b. Customs Bond c. Self-Insurance Bond d. Public Official Bond

A

Which type of bond is required of investment companies guaranteeing against misrepresentation of securities and defrauding the public generally? Choose one answer. a. Blue Sky Bond b. Public Official Bond c. Customs Bond d. Self-Insurance Bond

D

Which type of bond may be required by a public body for guaranteeing the licensee will operate in conformity with general laws or for the purpose of protecting the public against harm from unfair business? Choose one answer. a. Indemnity Bond b. Franchise Bond c. Permit Bond d. License Bond

A

Which type of bond may be required by a public body when it awards a franchise? Choose one answer. a. Franchise Bond b. Indemnity Bond c. License Bond d. Permit Bond

D

Which type of bond may be required by a public official for their term of office? Choose one answer. a. Blue Sky Bond b. Lost Instrument Bond c. Customs Bond d. Public Official Bond

D

Which type of bond meets the requirement to get a permit for a specific function? Choose one answer. a. Indemnity Bond b. Franchise Bond c. License Bond d. Permit Bond

B

Which type of court bond would be required of a defendant to guarantee their appearance in court? Choose one answer. a. Conservation Bond b. Bail Bond c. Probate Bond d. Court Bond

D

Which type of fiduciary bond is designed for those who administer estates of deceased persons? Choose one answer. a. Bail Bond b. Court Bond c. Fiduciary Bond d. Probate Bond

D

Which type of license bond holds a governmental body harmless from any injuries or damage caused by the principal's activities? Choose one answer. a. Franchise Bond b. Permit Bond c. License Bond d. Indemnity Bond