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

1. Risk tolerance - Understand personal risk appetite and financial capacity.
2. Time horizon - Determine the duration for which investment funds will be locked.
3. Market conditions - Assess current economic trends and market volatility.
4. Investment goals - Clearly define financial objectives, whether for growth or income.

1. Voting rights - Ordinary shareholders typically have the right to vote on company matters, influencing governance.
2. Dividends - Shareholders may receive dividends based on company performance, providing a potential income stream.
3. Capital appreciation - The value of shares can increase over time, providing a profit if sold.

To calculate the interest for Andries:

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

• $P = R3,000$
• $r = 0.10$
• $t = 2$ years

Thus, $I = R3,000 imes 0.10 imes 2 = R600$

Andries will receive R600 after 2 years.

To calculate the compound interest for Tshidi:

Using the formula for compound interest: $A = P(1 + r/n)^{nt}$ Where:

• $P = R3,000$
• $r = 0.10$
• $n = 1$ (compounded annually)
• $t = 2$ years

Thus, the future value is: $A = R3,000(1 + 0.10/1)^{1 imes 2} = R3,000(1 + 0.10)^{2} = R3,000 imes 1.21 = R3,630$

The interest earned is: $I = A - P = R3,630 - R3,000 = R630$

Tshidi will receive R630 after 2 years.

Comparing the two investment options, Andries will receive R600 after 2 years while Tshidi will receive R630 after the same period. Therefore, Tshidi's investment in the flexi-deposit account is the better option due to the higher interest earned. This demonstrates the benefits of compound interest compared to simple interest.

1. Electronic slides - These can enhance the presentation by visualizing complex data and keeping the audience engaged.
2. Printed copies of the financial report - Providing hard copies allows attendees to review the report while listening to the presentation.

Electronic slides are effective because they can incorporate graphics, charts, and bullet points, facilitating easier comprehension and retention of information. Visual content can also help to illustrate key data, making the presentation more interactive and engaging.

1. Audience engagement - Use methods to keep the audience interested, such as asking questions or involving them in discussion.
2. Clarity of information - Ensure that the slides and verbal explanations are clear, concise, and to the point.
3. Time management - Practice timing to ensure all points are covered without rushing and leaving out critical information.

Personal attitude plays a vital role in leadership because it influences the leader’s approach to challenges and interactions with team members. A positive attitude fosters an encouraging and motivating environment, leading to higher morale and productivity. Leaders who demonstrate commitment and enthusiasm inspire their teams to adopt similar attitudes, promoting collaboration and innovation within the organization.

Effective management is crucial for the success of a partnership as it sets direction and facilitates decision-making. Good management ensures that all partners are actively involved, utilizes their strengths effectively, and addresses conflicts promptly. Conversely, poor management can lead to misunderstandings, lack of direction, and ultimately the failure of the partnership.

Taxation can significantly affect a partnership’s success or failure. Partnerships often benefit from pass-through taxation, where income is only taxed at the individual partner level, reducing overall tax burden. However, cumbersome tax liabilities can encourage partners to withdraw their capital or exit, potentially destabilizing the partnership.