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2.1 State any FOUR examples of insurable risks - 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 ... show full transcript
Worked Solution & Example Answer:2.1 State any FOUR examples of insurable risks - 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
The advantages include:
- Security: They are backed by the government, making them a low-risk investment.
- Fixed returns: Investors receive guaranteed interest over the investment period.
- Accessibility: Available to the public, often with low minimum investment amounts.
Step 3
Step 4
Calculate the amount that AT will receive as compensation from the insurer. Show ALL calculations.
Answer
To calculate the compensation, apply the Average Clause:
- Determine the insured amount: R400,000
- Determine the market value: R600,000
- Determine the loss: R90,000
Formula:
Compensation = (Insured amount / Market value) × Loss
Calculating:
Compensation = (R400,000 / R600,000) × R90,000 = R60,000
Step 5
Elaborate on the meaning of debentures as a type of investment opportunity.
Answer
Debentures are long-term securities that companies issue to raise capital. They involve borrowing money from investors, who are then paid annual interest. Debenture holders do not have ownership rights but are prioritized over shareholders in case of liquidation.
Step 6
Discuss the impact of the democratic leadership style on businesses.
Answer
The democratic leadership style encourages collaboration and employee participation in decision-making. This can lead to increased engagement and job satisfaction. However, it may also slow down decision-making processes if input from numerous stakeholders is required.
Step 7
Step 8
Step 9
Advise businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Management.
Answer
Effective management can lead to improved decision-making and resource allocation, enhancing company performance. Conversely, poor management can result in miscommunication and inefficiencies, risking the company's viability.
Step 10
Advise businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Legislation.
Answer
Compliance with legislation assures stakeholders of legal protection and ethical conduct, positively influencing a company's reputation. Non-compliance can lead to legal liabilities and a loss of business operation, negatively impacting sustainability.