out after the creditors, but before the ordinary shareholders. 2.6 Describe / Evaluate the positives & negatives of the following forms of investment: Government [RSA] retail bonds • Unit Trusts • Shares • Deposits • Government Retail Bonds Advantages Disadvantages Government Safe way to invest with low risk. Low return on investment, because Retail Bonds of the low risk Guaranteed returns. Government default on Convenient and accessible, if the payment in the event of war or need arises. financial crisis No extra cost or commission. Convenient method of purchase, e.g. At the Post Office Advantages Disadvantages Unit Trust Allows the investor to buy a of Unit trust could decrease in value share and securities from a variety over time. of companies. Depended on the growth of blue chip companies. the potential risk. External factors impact Spread the risk amongst some high negatively on the value of the unit risk and some low risk investment. trust. Professional fund managers will invest the funds to ensure maximum returns and growth Provide a source of income on retirement Shares Advantages Disadvantages Can offer a much higher return on investment The value of the share price fluctuates than other investment options. Example Fixed over time deposits.
out after the creditors, but before the ordinary shareholders. 2.6 Describe / Evaluate the positives & negatives of the following forms of investment: • Government [RSA] retail bonds • Unit Trusts • Shares • Deposits Government Retail Bonds Advantages Disadvantages Government Retail Bonds Safe way to invest with low risk. Guaranteed returns. Convenient and accessible, if the need arises. No extra cost or commission. Convenient method of purchase, e.g. At the Post Office Low return on investment, because of the low risk Government default on payment in the event of war or financial crisis Advantages Disadvantages Unit Trust Allows the investor to buy a of share and securities from a variety of companies. the potential risk. Spread the risk amongst some high risk and some low risk investment. Professional fund managers will invest the funds to ensure maximum returns and growth Provide a source of income on retirement Unit trust could decrease in value over time. Depended on the growth of blue chip companies. External factors impact negatively on the value of the unit trust. Shares Advantages Disadvantages Can offer a much higher return on investment than other investment options. Example Fixed deposits. The value of the share price fluctuates over time
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