PRINCIPLES OF BUSINESS - REVISION QUESTIONS

PLEASE READ THE FOLLOWING QUESTIONS AND ANSWER BELOW THEM THEN SUBMIT.

QUESTIONS: (15 marks)

1. Outline 4 ways businesses can undertake investments. (4 marks)

 Stock market- the businesses can sell their stocks.
 Shares - Shares are considered a growth investment as they can help grow the
value of your original investment over the medium to long term.
 Mutual funds - Mutual funds are investments that pool your money together with
other investors to purchase shares of a collection of stocks, bonds, or other
securities.
 Fixed interest - The best-known type of fixed interest investments are bonds,
which are essentially when governments or companies borrow money from
investors and pay them a rate of interest in return.
2. Why should the government maintain a safe environment for investors? 
(3 marks)
The government should maintain a safe environment for investor so that the investor can
rely and feel safe, so that the country can earn income from these investors.

3. Why would the government want to tax imports? (3 marks)

The government want to tax imports because the government want the country to earn
Revenue and also encourage its citizen to buy local product.

4. Give a brief statement on EACH of the following terms: (5 marks)

 Night safe deposits- this is a service offered by banks to keep the customers’
items on behalf of the customers.
 Trustee work- Person appointed by the customers to handle work on behalf of
him.
 ATM- these are machines provided by the banks that allows the persons to carry
out transaction.
 Remittances- persons who are working aboard send back money to their
homeland.
 Settlement services- Financial service provide settlement service between one
customer and another (through their bank account), as well as between bank.