Which of the following is an alternative to a bid bond?

A cashier's check serves as an alternative to a bid bond because it provides a form of security to the project owner in the bidding process. A bid bond is typically required to ensure that the bidder has the financial backing and seriousness to undertake the contract if awarded. If the selected bidder fails to execute the contract or provide the required performance bond, the project owner can cash the bid bond to cover any potential losses.

Similarly, a cashier's check acts as an immediate and guaranteed payment method, backed by the issuing bank. This form of security assures the owner that the bidder has funds readily available and demonstrates a commitment to following through on the contract obligations. Thus, using a cashier's check can effectively provide the same level of financial assurance as a bid bond in a bidding scenario.

In contrast, while a letter of credit is also a financial instrument that can provide guarantees similar to a bid bond, it functions differently as it is a commitment from a bank to pay a specified amount upon request, suggesting a higher level of complexity in the relationship between the buyer, seller, and the bank. A performance bond applies after a contract is awarded and ensures the contractor's performance rather than securing the bid itself. Lastly, a personal guarantee, while it may offer some level of