Which of the Following Statements Is Correct with Respect to Bonding

question 49

Multiple Choice

Which of the following statements is correct with respect to bonding?

• A) Bonding is another term for insurance. The two terms, bonding and insurance, are interchangeable.
• B) If a person is bonded and that person commits some wrongful act such as stealing a client's money, the bonding company is bound to compensate him for any losses he suffers from being caught.
• C) Bonding provides protection to the victim injured by the wrongful conduct of the person bonded.
• D) Bonding provides protection against losses incurred because of fluctuations in the financial markets.
• E) Bonding is a government certification system whereby the government guarantees that a person so bonded or certified will do the job he is hired to do as set out in the bonding certificate.

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Definitions:

Securities Act Of 1933

A U.S. law enacted as part of the New Deal, aimed at regulating the offer and sale of securities to protect against fraud.

Investment Price

The amount of money paid to purchase an investment, such as stocks, bonds, or real estate.

Well-Known Seasoned Investor

An individual or entity recognized by securities laws as having sufficient experience and financial sophistication to participate in certain types of investment opportunities.

Free-Writing Prospectuses

Documents utilized in the securities offering process to provide additional information beyond the formal prospectus, allowing issuers to communicate freely with potential investors.