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3.1 State FOUR types of preference shares - NSC Business Studies - Question 3 - 2019 - Paper 1
Question 3
3.1 State FOUR types of preference shares. 3.2 Outline the advantages of unit trusts as a form of investment. 3.3 Read the scenario below and answer the question... show full transcript
Worked Solution & Example Answer:3.1 State FOUR types of preference shares - NSC Business Studies - Question 3 - 2019 - Paper 1
Step 1
Step 2
Outline the advantages of unit trusts as a form of investment.
Answer
Unit trusts offer several advantages:
- Managed by professionals, ensuring effective investment strategies.
- Diversification allows investors to spread risk across a range of assets.
- Accessibility for small investors to a diversified portfolio.
- A variety of investment options tailored to different risk appetites.
Step 3
Quote TWO roles of personal attitude in successful leadership displayed by Sihle in the scenario above.
Answer
- Sihle demonstrates a positive attitude, which encourages employee engagement and teamwork.
- His willingness to learn indicates humility, showing employees that continuous improvement is valued.
Step 4
Advise Sihle on the impact of the democratic leadership style on MH as a business.
Answer
The democratic leadership style can foster a collaborative work environment, enhancing employee morale and innovation. However, it may also lead to indecisiveness during crises, requiring careful management to balance employee input with timely decision-making.
Step 5
Discuss the importance of insurance for businesses.
Answer
Insurance is crucial for businesses as it protects against potential losses and risks. It ensures that assets are secured, provides liability coverage, and assists in financial stability during unforeseen events. This protection allows businesses to operate with a greater sense of security and can aid in recovery after incidents.
Step 6
Explain the following factors that may be considered when making investment decisions:
Answer
3.5.1 Return on investment: This factor assesses the potential gain from an investment relative to its cost. It is crucial for determining whether the investment aligns with financial goals.
3.5.2 Liquidity: This refers to how quickly an investment can be converted to cash without significant loss. Investors need to consider their cash flow needs when making decisions.