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2.1 State any FOUR examples of insurable risks - English General - NSC Business Studies - Question 2 - 2022 - Paper 2
Question 2
2.1 State any FOUR examples of insurable risks. 2.2 Outline the advantages of Government/RSA Retail Savings Bonds as a form of investment. 2.3 Read the scenario belo... show full transcript
Worked Solution & Example Answer:2.1 State any FOUR examples of insurable risks - English General - NSC Business Studies - Question 2 - 2022 - Paper 2
Step 1
Step 2
Outline the advantages of Government/RSA Retail Savings Bonds as a form of investment.
Answer
Government/RSA Retail Savings Bonds are considered safe investments as they are backed by the government. Their advantages include:
- Guaranteed Returns: Investors receive a guaranteed interest rate, providing a reliable income stream.
- Low Risk: Being government-backed, they are seen as low-risk investments compared to other financial products.
- Liquidity: Bonds can be redeemed at intervals, offering some level of liquidity.
- No Management Fees: They come with no associated management fees, preserving the investor's returns.
Step 3
Step 4
Calculate the amount that AT will receive as compensation from the insurer. Show ALL calculations.
Answer
To calculate the compensation amount for Amandla Traders, we can use the following formula:
ext{Compensation} = ext{Insured Amount} imes rac{ ext{Loss}}{ ext{Market Value}}Where:
- Insured Amount = R400,000
- Market Value = R600,000
- Loss = R90,000
Plugging in the values:
ext{Compensation} = R400,000 imes rac{R90,000}{R600,000}Calculating:
Thus, AT will receive R60,000 as compensation.
Step 5
Elaborate on the meaning of debentures as a type of investment opportunity.
Answer
Debentures are a type of long-term security that companies issue to raise capital. They serve as a loan made by investors to the company, which promises to pay back the principal along with periodic interest payments.
Key Features:
- Interest Payments: Debenture holders receive fixed interest payments.
- Repayment: Upon maturity, the principal is repaid.
- No Shareholder Rights: Debenture holders do not have equity in the company, meaning they do not have voting rights.
Debentures can be less risky than stocks as they provide fixed returns, making them an attractive option for conservative investors.
Step 6
Discuss the impact of the democratic leadership style on businesses.
Answer
The democratic leadership style can have a significant impact on businesses in several ways:
- Employee Engagement: This style encourages participation from employees, leading to higher engagement and job satisfaction.
- Decision-Making: Enhanced collaboration in decision-making can lead to more informed choices, potentially resulting in better outcomes.
- Innovation and Creativity: A collaborative environment fosters creativity as employees feel valued and are more willing to share ideas.
- Challenges: However, the style may also lead to longer decision-making processes, as it involves consulting with multiple stakeholders.
Step 7
Step 8
Explain the areas of improvement that Mary should consider for her next presentation.
Answer
- Setting Clear Objectives: Mary should specify the goals she wants to achieve with her presentation to ensure clarity.
- Utilizing Visual Aids: Enhancing her presentation with diagrams or slides could improve retention and understanding.
Step 9
Address businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Management.
Answer
Effective management is pivotal for the success of a personal liability company. Key factors include:
- Qualified Leadership: Appointing skilled managers can drive better performance and align the team with the company’s goals.
- Decision-Making Structures: Efficient decision-making processes can speed up operations and resource allocation.
- Employee Engagement: Managers should foster a collaborative environment to encourage employee contribution and satisfaction.
Step 10
Address businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Legislation.
Answer
Compliance with legislation is crucial for the success of a personal liability company. Key points include:
- Legal Compliance: Adhering to laws protects the company and builds consumer trust.
- Avoiding Penalties: Non-compliance can lead to fines or legal action, destabilizing the business.
- Understanding Regulations: Staying informed about changes in legislation ensures that the company can adapt to new requirements efficiently.