Question

Distinct qualities of surety bonds include:

a) High interest rates
b) Legal obligations
c) Stock market investments
d) Short-term maturity

Answer 1

The distinct qualities of surety bonds do not include high interest rates, stock market investments, or short-term maturity. Instead, surety bonds are primarily characterized by legal obligations.

Step-by-step explanation:

The distinct qualities of surety bonds do not include high interest rates, stock market investments, or short-term maturity. Instead, surety bonds are primarily characterized by legal obligations. Distinct qualities of surety bonds include:

1. Legal obligations: Surety bonds are a legal contract between three parties: the principal (the party who needs the bond), the obligee (the party requesting the bond), and the surety (the bonding company). The principal agrees to fulfill certain obligations, and if they fail to do so, the surety steps in to compensate the obligee.
2. Short-term maturity: Surety bonds are typically issued for a specific period, such as one year. Once the bond matures, the obligation is fulfilled, and the bond is no longer in effect.