3.1 Define the term insurance and give TWO examples of insurable risks - NSC Business Studies - Question 3 - 2016 - Paper 1

When making investment decisions, the following factors should be considered:

1. Risk Tolerance - The level of risk an investor is willing to take.
2. Investment Objectives - The purpose of the investment, such as saving for retirement or generating an income.
3. Market Conditions - Current trends and economic indicators can affect the performance of investments.
4. Time Horizon - The length of time an investor plans to hold the investments before needing the funds.

Advantages of ordinary shares include:

1. Voting Rights - Shareholders have a say in company decisions and policies through voting.
2. Dividend Income - Investors can receive dividends, providing a stream of income.
3. Capital Growth - Ordinary shares can appreciate in value over time, yielding potential capital gains.

To calculate the interest for Andries:

Using the simple interest formula: $I = P imes r imes t$ Where:

• $P = R3000$
• r = 10 ext{%} = 0.10
• $t = 2$ years

So,

$I = R3000 imes 0.10 imes 2 = R600$

Andries will receive R600 in interest after 2 years.

Tshidi's interest can be calculated using the formula for compound interest: $A = P(1 + r)^t$ Where:

• $P = R3000$
• r = 10 ext{%} = 0.10
• $t = 2$ years

Calculating: $A = R3000(1 + 0.10)^2 = R3000(1.21) = R3630$

The interest earned will be: $Interest = A - P = R3630 - R3000 = R630$

Tshidi will receive R630 in interest after 2 years.

Comparing the two options:

• Andries earns R600.
• Tshidi earns R630.

Conclusion: Tshidi's investment option is better because it yields a higher interest amount of R630 compared to R600 from Andries' investment.

Two visual aids Hope can use include:

1. Electronic slides - to present visual information dynamically.
2. Printed copies - to provide a tangible reference for meeting participants.

Using electronic slides is effective because they allow for incorporation of engaging visuals, which can enhance understanding and retention of information. They can also include animations and transitions that keep the audience's attention.

Factors Hope should consider include:

1. Audience Engagement - Tailoring content to suit the audience’s interests to maintain interest.
2. Clarity of Information - Ensuring that the main points are clearly articulated and easy to understand.
3. Time Management - Keeping the presentation within the allotted time to prevent rushing or cutting important points.

Personal attitude plays a crucial role in leadership by:

• Influencing team morale - A positive attitude promotes a good working atmosphere.
• Setting an example - Leaders who exhibit confidence and a proactive mindset inspire their teams.
• Encouraging openness - An approachable attitude fosters trust and encourages team members to share their ideas or concerns.

Effective management can lead to success by:

• Ensuring that all partners are actively involved and their skills utilized.
• Reducing conflicts by encouraging open communication about decisions.

Conversely, poor management can lead to failure:

• Partners may disagree on management styles, causing tension, or some partners may feel neglected, leading to disengagement.

Taxation can contribute to success by:

• Allowing partnerships to benefit from joint tax administration, reducing overall tax liabilities.

In contrast, it can lead to failure if:

• Part of the profits are taxed heavily, discouraging partners by restricting financial reinvestment into the business.