AFSB 151 Practice Exam Questions and

AFSB 151 Practice Exam Questions and Answers (Solved Papers) Large accounts should be monitored to ensure that when companies add subsidiaries or affiliates or are acquired by new owners, the new parties sign a new indemnity agreement. Otherwise, if a claim arises, the surety might have only which one of the following to fall back on?

Select one:

• The bond form
• The three-party surety agreement.
• Its common-law rights
• An obsolete indemnity agreement - Correct Answers

✅C. Its common-law rights The Barker Group hired Meyer Construction to build a new high-rise office building. As part of the construction contract, Meyer Construction was required to secure a number of contract bonds naming The Barker Group as the obligee.Which one of the following types of bond guarantees that bills incurred by the contractor for labor and materials will be fully paid at the completion of the project?

Select one:

• Bid bond
• Payment bond
• Performance bond
• Maintenance bond - Correct Answers ✅B. Payment bond 1 / 4

AFSB 151 Practice Exam Questions and Answers (Solved Papers) Which one of the following statements is true regarding a surety producer's role in its performance of credit analyses?

Select one:

• Producers help contractors when they recommend a

slightly larger credit line than the contractor's experience and finances support, because it will enable the producer to grow its business.

• The producer's credit analysis should be lengthy and

contain full details on the contractor's history, organization, management, performance, financial performance and condition, and related items.

• The producer's credit analysis should include a

recommendation of a "responsible" line of surety credit and an appropriate work program to encourage the contractor's responsible growth.

• Producers assist contractors and sureties when they

recommend a credit line for a contractor that is smaller than the contractor's experience and finances support because it reduces the chance of bond default. - Correct Answers ✅C.The producer's credit analysis should include a recommendation of a "responsible" line of surety credit and an appropriate work program to encourage the contractor's responsible growth.Lisa is a contract surety bond underwriter. After reviewing the work-on-hand report for one of the contracting principals, she 2 / 4

AFSB 151 Practice Exam Questions and Answers (Solved Papers) is concerned that the contractor has too much backlog relative to its financial position. Lisa will likely do which one of the following until the contractor demonstrates that the job programs as practically and financially feasible?

Select one:

• Restrict future bidding for the contractor
• Increase the contractor's line of credit
• Forfeit existing bonds for the contractor
• Reduce the contractor's line of credit - Correct Answers

✅A. Restrict future bidding for the contractor Which one of the following statements regarding commercial transactions law is true?

Select one:

• Under a UCC filing, the creditor having the first lien on

security interests in property receives a pro rata share of the proceeds from a sale before any other lien holders.

• Under the UCC, a creditor receives a security interest in

goods in return for granting credit to a buyer.

• All states have adopted the entire Uniform Commercial

Code (UCC).

• Under the UCC, a security interest in goods means that, if

a buyer defaults on a loan, the creditor can seize all of the buyer's property, sell it, and keep all profits. - Correct 3 / 4

AFSB 151 Practice Exam Questions and Answers (Solved Papers) Answers ✅B. Under the UCC, a creditor receives a security interest in goods in return for granting credit to a buyer.Allison was underwriting a new account that another surety previously bonded. She was concerned that the contractor might have problems not readily apparent that might cause a potentially large loss. Which one of the following facts might indicate that such a loss is a particularly relevant concern?

Select one:

• The contractor's prior surety refused to write a bond the

contractor wanted.

• The contractor had an uncooperative certified public

accountant or banker.

• The contractor had a personality conflict with the prior

producer.

• The contractor had a personality conflict with the prior

surety. - Correct Answers ✅A. The contractor's prior surety refused to write a bond the contractor wanted.Which one of the following types of bond would make a surety liable for the difference between what should have been collected and the amount that can be accounted for, even though a public official might not have been dishonest?

Select one:

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