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AAMI COMP FINAL SCRIPT 2026 FULLY
SOLVED ANSWER COLLECTION
โ Risk. Answer: a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected of hoped for. โ Risk Management. Answer: all efforts designed to preserve assets and earning power associated with a business. โ Market Risk. Answer: is the uncertainty associated with an investment decision. โ Pure Risk. Answer: a situation where only loss or no loss can occur. โ Risk Control. Answer: minimizes losses through avoidance and/or reduction. Ex: Security Officers, cameras, Employee Handbooks, driving safely. โ Risk Financing.
Answer: the process of transferring risk versus risk retention. Ex: purchasing insurance. โ Property Risks. Answer: risks that involve tangible and intangible assets. โ Perils. Answer: a cause of loss by either natural events or actions of people. โ Losses. Answer: direct losses such as damage to property and indirect losses which arise from the inability to continue normal business operations. โ Statutory Liability. Answer: laws create obligations on part of the business. (Workers Compensation laws) โ Contractual Liability. Answer: involve contracts entered into with other parties. โ Tort Liability. Answer: civil wrongs including breach of contracts and torts.
Answer: a provision of property insurance policies that requires the insured to carry a minimum policy limit relative to the value of the property. โ Business Interruption Insurance. Answer: insurance that protects companies during the period necessary to restore the property damaged by an insured peril. โ General Liability Coverage. Answer: coverage provides payment for bodily injury and property damage. It covers customer oriented risk such as injury to customers caused by a firms product. โ Coinsurance Clause. Answer: requires that a property be insured for at least 80% of the property's actual replacement cost or value. Value or replacement are determined at the time of the loss. โ Product Liability Insurance. Answer: insurance that protects a firm against claims that its product caused bodily injury or property damage to the user. โ Buy Sell Insurance.
Answer: provides coverage in the case of the disability or death of a business partner during the creating, buying, or selling of a business. โ Professional Liability Insurance. Answer: insurance that is a specialty coverage such as malpractice insurance. โ Key Person Life Insurance. Answer: life insurance that protects a firm against losses due to a death of a key employee. โ Disability Insurance. Answer: provides payment of a portion of the disabled person's monthly income. โ Self Insurance. Answer: a form of risk management whereby part of the firms earnings is earmarked as a contingency fund for possible future losses, specifically for individual loss categories, such as property, medical, or workers comp. โ Workers Compensation.
โ Business. Answer: an organization that combines inputs of raw material, capital, labor, and management skills to produce useful outputs of goods and services so as to earn a profit. โ Business Plan. Answer: a written description of a new idea that projects marketing, operational, and financial aspects of a proposed business. โ Business Policies. Answer: fundamental statements that serve as guides to management practice. โ Cash Discounts. Answer: 2/10, n/30 = 2% discount if paid 10 days from date of invoice/net amount must be paid within 30 days of invoice. โ Census of Business. Answer: source of market data that explains where certain businesses are located. โ Census of Housing.
Answer: source of market data that keeps track of new home sales by region and/or the construction of new houses by region and specific area. โ Census of Manufacturing. Answer: source of market data that explains where certain manufacturers are located. โ Census of Population. Answer: a source of market data that complies population statistics with regard to distribution of population by region, area, etc. โ Chamber of Commerce. Answer: an association of business people who attempt to protect and promote the commercial interest in a community. โ Civil Rights Act. Answer: federal legislation that prohibits discrimination on the basis of race, color, religion, sex, pregnancy, or natural origin. โ Competition. Answer: the practice of trying to obtain something that is being sought by others under similar circumstances at the same time.
Answer: a business valuation approach which centers on estimating the amount of potential income that may be produced by the business the next year. โ Economic Order Quantity. Answer: the quantity to be purchased which minimizes the total costs. โ Employment Application. Answer: a record of statements made at the time the applicant first seeks employment. โ Employment Interview. Answer: the primary way of judging the job applicant's appearance, poise, speech, etc. โ Entrepreneur. Answer: one who organizes, manages, and assumes the risk of a business firm or venture. โ Equal Employment Opportunity Act. Answer: the absence of employment discrimination based on race, color, religion, sex, or national origin.
โ Equal Pay Act. Answer: outlaws discrimination in pay against those who are forty years old. โ Evaluating. Answer: a management function which compares organizational and individual performance with predetermined standards or expected results. โ Factoring. Answer: obtaining cash before payments are received from customers by selling off one's accounts receivable to a third party. โ Fair Labor Standards Act. Answer: outlaws discriminatory practices in pay; requires employers to pay a minimum wage to employees, and to pay a minimum of one week and one-half times the regular rate for any hours beyond forty worked in a week. โ Fixed Capital. Answer: long-term capital that is invested in the small business; also funds invested in such long-term assets as: land, building, machinery, furniture, fixtures, and other equipment.
โ Intangible Assets. Answer: those assets that cannot be touched or grasped. โ Job Analysis. Answer: the process of determining the critical components of a job for purposes of selecting, training, and rewarding personnel. โ Job Description. Answer: a document that lists the major responsibilities and tasks of the job. โ Job Specification. Answer: a document that lists the knowledge, skills, abilities, and personal characteristics a job holder must possess to perform effectively. โ Liquidation Value Approach. Answer: the anticipated value of an asset that would be realized in case of the liquidation of the business. โ Human Resource Planning.
Answer: developing a comprehensive strategy for meeting future human resource needs. โ Management. Answer: the art and science of motivating people toward the achievement of a goal. โ Manufacturing Business. Answer: a business that makes finished goods from raw materials by hand or machinery. โ Market. Answer: a group of potential customers possessing purchasing power and unsatisfied needs. โ Market Survey. Answer: a study that is used by businesses to determine where the potential customers are located. โ Market Value Approach. Answer: an approach used in business valuation which determines value based upon previous sales of similar businesses.
Answer: to arrange or constitute in interdependent parts, each having a specific function or relation with respect to the whole; the arrangement and distribution of work among members of an organization. โ Overhead. Answer: expenses incurred in the normal operation of a business. โ Patent. Answer: the registered right of an inventor to make, use, and sell an invention. โ Personal Capital. Answer: capital that is invested in the business by the owners. โ Planning. Answer: that function of determining in advance what needs to be accomplished in order to achieve a particular goal. โ Pricing Policy. Answer: factors which influence the price. โ Recruitment.
Answer: the process of forming a pool of qualified applicants for tasks that need to be filled. โ Replacement Value Approach. Answer: the fair market price to purchase similar products in similar conditions. โ Resume. Answer: written summary of ones personal, educational, and professional achievements. โ Sales Promotion. Answer: a plan which provides inducements to potential purchases of products and/or services. โ Service Business. Answer: a business which provides a service rather than a product. โ Small Business. Answer: a business which is independently owned and operated and is not dominant in its field of operations. โ Small Business Administration.
Business is small compared to big competitors Has less than 100 employees โ Most Small Business owners leave their corporate jobs to be their own boss. Answer: True โ 3 Primary Rewards of Entrepreneurs. Answer: Profit Independence Personal Fulfillment โ Refugee. Answer: a person who leaves their homeland & goes into business for themselves in a new country โ What is the ideal age for becoming an entrepreneur?. Answer: Mid 20's to Mid 30's โ Precipitating Event. Answer: catalysts that hasten the move to entrepreneurship Ex. Losing a job or Stumbling across a business opportunity
โ Legacy. Answer: things passed on or left behind tangible/intangible items โ Ethical. Answer: doing the right thing โ Better Business Bureaus. Answer: Promotes ethical conduct of businesses in a community Give guidelines & information about a company to consumers before they do business with the company Resolves questions & disputes over purchases after the fact โ Environmentalism. Answer: an effort to preserve & redeem the natural environment โ Examples of internal problems (consumerism). Answer: Mismanagement Lack of Cash Flow Human Resource Management
