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2.1 State any FOUR examples of insurable risks - NSC Business Studies - Question 2 - 2022 - Paper 2

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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 be... 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

State any FOUR examples of insurable risks.

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Answer

  1. Theft
  2. Fire
  3. Burglary
  4. Natural disasters (like floods or storms)

Step 2

Outline the advantages of Government/RSA Retail Savings Bonds as a form of investment.

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Answer

  1. Safe investment with government backing.
  2. Predictable and fixed interest returns.
  3. Low minimum investment.
  4. Accessible to all types of investors.

Step 3

Name the insurance clause that is applicable in the scenario above.

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Answer

Average Clause

Step 4

Calculate the amount that AT will receive as compensation from the insurer. Show ALL calculations.

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Answer

The formula to calculate the compensation is:

ext{Compensation} = ext{Insured Amount} imes rac{ ext{Loss}}{ ext{Market Value}}

Thus,

ext{Compensation} = R400,000 imes rac{R90,000}{R600,000} = R60,000

Step 5

Elaborate on the meaning of debentures as a type of investment opportunity.

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Answer

Debentures are a type of debt instrument that companies issue to raise capital. Investors who purchase debentures are essentially loaning money to the company, which will pay back the principal along with interest at specified intervals. They are a lower-risk investment compared to stocks but usually offer lower returns as well.

Step 6

Discuss the impact of the democratic leadership style on businesses.

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Answer

A democratic leadership style encourages collaboration and participation from employees. This can lead to higher morale and workplace satisfaction since employees feel valued. However, if not managed correctly, it may result in delayed decision-making due to the need for consensus.

Step 7

Quote TWO factors that Mary considered during her presentation from the scenario above.

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Answer

  1. Maintained eye contact with her audience.
  2. Managed her time effectively to allow for questions.

Step 8

Explain the areas of improvement that Mary should consider for her next presentation.

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Answer

  1. Establish clear objectives to ensure her message is focused.
  2. Enhance visuals and presentation materials to keep the audience engaged.

Step 9

Advise businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Management

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Answer

Effective management is crucial as it ensures timely decision-making and direction for the company. Poor management can lead to inefficiencies and lack of direction, ultimately risking the company’s performance.

Step 10

Advise businesses on how the following criteria could contribute to the success and/or failure of a personal liability company: Legislation

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Answer

Compliance with legislation is critical as it promotes a positive corporate image and helps avoid legal penalties. However, failure to comply can lead to costly legal issues and damage the company's reputation.

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