3.1 Give THREE examples of insurable risks - NSC Business Studies - Question 3 - 2018 - Paper 1

Ordinary shareholders possess certain rights, including:

1. Voting rights: They have the right to vote at the Annual General Meeting and participate in decisions affecting the company.
2. Rights to dividends: Shareholders have a right to receive dividends when declared by the company's board.

Tammy is applying the Situational Leadership Theory which emphasizes adapting leadership styles to the maturity level of employees.

Situational Leadership Theory suggests that different situations require different leadership styles. This theory allows leaders to manifest flexibility, enabling them to motivate and guide their teams efficiently depending on the needs and maturity levels of employees. By assessing the readiness of her team members, Tammy can apply directives or support as appropriate, enhancing group performance.

A private company does not offer its shares to the general public and is typically controlled by a small group of shareholders. Examples include family-owned businesses. In contrast, a public company issues shares to the public through a stock exchange, allowing a broader ownership base and subjecting the company to more regulations and disclosures.

To calculate the simple interest, we use the formula: $ext{Interest} = P imes r imes t$ Where:

• $P = R30,000$
• $r = 0.12$
• $t = 2$ years.

Calculating: $ext{Interest} = 30,000 imes 0.12 imes 2 = R7,200$ Therefore, Ronnete will receive R7,200 in interest after two years at Saints Bank.

To calculate the compound interest, we use the formula: $A = P(1 + r/n)^{nt}$ Where:

• $A$ is the amount of money accumulated after n years, including interest.
• $P = R30,000$
• $r = 0.12$
• $n = 1$ (compounded annually)
• $t = 2$ years.

Calculating: $A = 30,000(1 + 0.12/1)^{1 imes 2} = 30,000(1.12)^2 = 30,000 imes 1.2544 = R37,632$ The total interest earned is R37,632 - R30,000 = R7,632.

Ronnete should choose to invest with Caprica Bank. Over two years, she would earn a total interest of R7,632 with compounded interest, compared to R7,200 with Saints Bank's simple interest. The ability for the interest to accumulate on both the principal and previously earned interest makes compounded investment more beneficial in the long run.

Two key principles of insurance include:

1. Insurable Interest: The insured must have a legitimate interest in the subject matter of the insurance policy. This principle prevents moral hazard and ensures that the insured stand to lose financially if the event occurs.
2. Utmost Good Faith (Uberrimae Fidei): Both parties, especially the insured, are expected to disclose all relevant information truthfully. This principle is vital to maintaining transparency and trust between the insurer and the insured.

Sipho used hard copies of his plans as a visual aid. This is evident from the line stating, "Hard copies of his plans were distributed for future reference," indicating the use of printed materials to support his presentation.

Hand-outs can significantly enhance the effectiveness of a presentation. Positives include providing attendees with key information and reminders of the session, which can facilitate retention and engagement. However, negatives may arise when hand-outs overwhelm the audience with information or detract attention from the speaker, especially if they lead to distractions during the presentation.

Sipho must ensure clarity and understandability in his responses. He should:

1. Listen carefully to each question before answering.
2. Keep his responses concise and directly relevant to the question.
3. Use professional language and maintain a respectful tone to encourage further questions and demonstrate confidence in the subject matter.