Florida Insurance Claims Adjuster License Practice Exam

Which bond protects the consumer against misrepresentation of a securities dealer?

1. A. Blue Sky bond

2. B. Permit bond

3. C. Payment bond

4. D. Lost Instrument bond

The correct answer is: A. Blue Sky bond

A Blue Sky bond is a type of insurance that protects consumers from fraud or misrepresentation by securities dealers. This means that if the dealer commits misconduct, such as providing false information or omitting important details, the bond can provide financial compensation to affected consumers. Option B, a permit bond, is a type of surety bond that guarantees the recipient will comply with all laws and regulations. Option C, a payment bond, is a type of surety bond that ensures the completion of a project and payment of all workers and subcontractors. Option D, a lost instrument bond, is a type of surety bond that protects the owner of a lost or stolen financial instrument, such as a stock certificate or promissory note. These options do not provide protection specifically against misrepresentation by securities dealers. Therefore, they are all incorrect choices for this question.