If the Principal Debtor Defaults, the Surety Has Rights Against

question 80

Multiple Choice

If the principal debtor defaults, the surety has rights against the principal debtor, third parties, and cosureties. These rights would include:

• A) exoneration.
• B) reimbursement.
• C) subrogation.
• D) contribution.
• E) All of these.

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Definitions:

Revenue Bond

A type of municipal bond supported by the revenue from a specific project, like a toll road or public utility, rather than from tax revenue.

Secured Bond

A type of bond backed by the issuer's assets, providing a safeguard to bondholders by promising specific collateral in case of default.

Pass-through Bond

A type of security that pools investments and passes the income from these investments through to the investors.

Direct Transfers

The movement of funds or assets from one party directly to another without intermediaries.