Tips To Score Well22.pptx

10 KEYS TO EXAMINATION SUCCESS IN COMMERCE 1.

2. 3.

4. 5.

Study regularly and take effective notes Use a textbook as the centre of your study Make use of other support materials and take note of what is going on around you Plan your revision and start early Get ready the night before the examination – materials, stationery, extra pens, calculators, entry document

6. Read the examination instructions and examination questions carefully and spend time in Paper 2 choosing which questions to answe 7. Start with the question you are most confident about 8. Obey the command words of the questions and follow the mark allocations for the part questions 9. Answer the correct number of questions 10. Stay calm. Don’t panic

REASONS FOR CANDIDATE FAILURE IN COMMERCE ‘O’ LEVEL EXAMINATIONS 1. Poor choice of questions 2. Omission of questions or parts of questions 3. Answering all the questions on the paper (Paper 2) instead of the four required 4. Poor language skills 5. Lack of knowledge of the subject

Insufficient detail in responses 7. Failure to follow the command words and respond to the mark allocation for the questions 8. Inability to use commercial terminology 9. Writing out the question 10. Very, very poor presentational skills e.g. handwriting 6.

 Part of every question was marked according to Levels

of Response.  The part questions with the highest mark tariff were usually marked in this way.  Those candidates who wrote developed answers and who responded to command words such as ‘discuss’ or ‘advise’ were able to gain level 3 marks.

 Candidates who contented themselves with giving

advantages and/or disadvantages of the topic set usually gained level 2 marks. Some candidates who presented lists remained in level 1.

 It should be remembered that it is not enough to

present a list of points, probably memorised from the candidate’s lesson notes. It is important to develop these points – to say why something is important, why something is expensive, why something is difficult.  If candidates offer some development of their answers, they will then achieve a higher level and so more marks.

How will you write answer of this question? Q;Mr Patel has the following two options: • set up as a sole trader; • become a franchise. Discuss both these options. Which would you recommend? Give reasons for your choice. [6]

 This question called for a full discussion of the

advantages and the disadvantages of both a sole trader and a franchise and then a reasoned recommendation.  Many candidates completed the discussion and gave a recommendation but failed to substantiate the recommendation adequately so remaining at Level 2 marks.

 It is important that candidates follow the rubric of the

question even if it means repeating themselves with the reasons given for the recommendation.  It is not sufficient to say ‘I recommend … for the reason given above’.

 Level 3 (5–6 marks) Has discussed both options and has made a recommendation substantiated by convincing reasoning If Mr Patel sets up a sole trader he will be his own boss, can make his own decisions and can operate the business as he wishes. He will have unlimited liability and will be responsible for his losses with the risk of losing his personal assets. He will, however, enjoy any profits he makes. On the other hand setting up a franchise will be less risky. He will have the backing of a tried and tested business, a well known name and product or service and the back-up of a large business which can help him sort out any problems he may have. Franchises are more likely to succeed than sole trading business. If Mr Patel feels that he lacks the skills necessary to be a successful entrepreneur he should make a franchise agreement. If he has the resources to set up as a sole trader he should consider this as he will not have to make annual payment, a percentage of his turnover and he will have greater freedom of action. I would recommend that Mr Patel considers a franchise initially until he feels that he could be more successful on his own. Tyres and batteries required a large capital investment and the franchise company will provide this rather than Mr Patel borrowing very large

sums from his bank.

 Level 2 (3–4 marks)

Has commented on both options and has made a reasoned recommendation OR has discussed both options without a recommendation OR has made a reasoned recommendation based on the discussion of one of the options Mr Patel would be the sole owner and keep all the profits if he set up as a sole trader. He would have the backing of a large, well-established company if he became a franchise. I would recommend that he became a franchise because it will be less risky, he will have support from the large company and he is less likely to fail.

 Level 1 (1–2 marks)  Has made some superficial comments

on one or both of the options with or without a recommendation. As a sole trader. Mr Patel has his own business. He does not have to answer to anyone so I recommend that he sets up his business as a sole trader.

 if a question says ‘should they …., candidates

are usually required to give an opinion with reasoning to support this opinion.  It would be helpful if candidates spread out their work better – leaving a line between each question chosen and leaving a line between each part of each question. recommendation or opinion was omitted

 Candidates should look at the words which begin

questions in relation to the mark allocations for those questions.  If a question says “State” or “Identify”, it means that a short answer is required and the answer is usually worth one mark.  If a question requires a candidate “To explain” , there needs to be a more developed answer and there will be a greater mark allocation.  There is no doubt that a clearly written script (preferably using black ink or ballpoint pen) helps the Examiner.

 It is important, however, when using answer

booklets that candidates do not write in the margins reserved for Examiners and do not change their handwriting so that it is so small that it is very difficult to read. There were two empty pages at the end of the answer booklet and these, with reference made on the question, could have been used to complete answers.

 Personal service, informal credit,

location of small shops, longer opening times and providing speciality services as reasons for the survival of many small shops.

 newspapers were the cheapest means and

that they were purchased by many people. Very few wrote about newspapers providing detailed information or being kept for reference. As regards television advertising, many candidates mentioned this is a mass medium and that it could provide sound and visual impact.

 It should be remembered that for any

perishable cargo to be taken by sea, it will need refrigeration and containerization

 The main documents used in international trade such

as;  The bill of lading  the air waybill Are the most popular choices

 but documents such as the indent, the invoice, the

certificate of origin, the delivery note/consignment note, the dock warrant, the shipping note and the bill of exchange were also allowed.

 The main documents of home trade such as enquiry,

quotation, order, invoice, delivery note, the credit note and the statement of account.

 Candidates should remember that limited liability

relates to the shareholders rather than the company.

 Many confused seasonal production i.e. production at

certain times of the year with seasonal demand. Instead of writing about the storage of products such as food to provide a constant supply, many candidates wrote about products produced all the year round but required only at certain times of the year e.g. umbrellas, blankets

 containers can act as small warehouses, reducing

theft/damage, needing less handling and can also speed up the delivery of goods.

 the changes in wholesale trade were expected with

comment on cash and carry warehouses and voluntary chains.

 many different uses for the insurance premiums ; to

make profit, investment and paying expenses

 some confusion between limited and unlimited

liability.  In selecting a suitable media of advertsing, concentrate

on cost, target market, area to be covered, the product and details required.

 Have a good understanding of direct debit and the fact

that the creditor requests payment when using direct debit.

Why countries import goods and services?  political reasons, satisfying consumers, providing what

the country lacks and helping to develop its economy.

 how exports might be increased; reduction in export

duty

 When selecting method of finance think of what these

kinds of finance might be used for - long term for expansion or the purchase of fixed assets, short term for trading activities and to overcome cash flow problems.

 long term finance such as preference shares or a

mortgage.  The differences between loans and overdrafts

Is it correct?  Some candidates thought that Hire Purchase was

suitable for buying a new factory or for repairing the office building and that debentures should be used for paying for computer software.

 Loans, debentures and ordinary shares were accepted

for the factory.  Trade credit and overdraft were accepted for the software.  Bank loan and overdraft were accepted for the repair to the office building.

 the larger carrying capacity of aircraft, the increase in

the number of goods of low bulk and high value now being exported and the increased number of airports, air routes and cargo planes available

 the term direct services - those services performed

directly to the people who receive them –examples; such as nursing, teaching, hairdressing

What factors have led to the growth of the self-service system of retailing?  the growth of large scale retailing, the desire to cut

labour costs, the increase in the branding and packaging of goods and the demands of consumers wishing to save time and examine goods have all led to the development of self-service retailing.

 Other candidates gave descriptive answers talking

about trolleys, more space and the display of goods.

A Retailer is thinking of installing vending machines to sell drinks outside his shops. Discuss the arguments for and against installing vending machines.  commenting on 24-hour service, additional income,  convenience to buyers, theft, vandalism and

maintenance costs.

Explain why Mr Ahmed may have to pay a larger insurance premium for fire insurance than Mrs Singh.  relating to nature of the goods in the shop,  the value of these goods, previous claims made, fire

precautions installed and different demands of different insurance companies.

Explain two business risks, apart from fire, against which both Mr Ahmed and Mrs Singh should insure.  Most candidates were able to name two business risks

but they often had difficulty commenting on such risks as theft and flood to gain the additional marks for explanation.

 Those candidates who listed public liability,

consequential loss, fidelity bond or employer’s liability usually gained full marks.

How to reduce imports?  subsidising home products, encouraging local

manufacturers, increasing import duties, introducing quotas and embargoes and using devaluation and exchange control regulations.

A manufacturer of clothing has decided to use an export merchant to sell her goods abroad.  What are the advantages of using an export merchant

rather than exporting the goods herself?

 Candidates were able to score marks even if they

confused an export merchant with an export agent. An export merchant is a person who buys goods from the manufacturer on his/her own account and looks for buyers in order to make a profit. An export merchant does not sell on commission as does an agent.

 Many of the advantages are, however, the same such as

saving the manufacturer looking for buyers, saving time and costs and overcoming difficulties such as language and distance.

Explain why retailers will usually accept each of the following in payment of debts: (i) cash [3] (ii) cheques [4] (iii) credit cards

 that many candidates had no understanding of cheque

cards and debit cards and wrote about cheques and credit cards instead.

 A cheque card guarantees a cheque up to certain

amount, the cheque cannot be stopped and it is protection against the cheque being refused by the bank because of insufficient funds.

 A debit card enables payments to be made without

writing cheques, the amount is automatically deducted from the person’s bank account and immediate transfer of funds takes place.

Methods of payment used by importers  Most candidates failed to appreciate that the payment

was for imported goods so an international method of payment was needed rather than one of the methods of payment listed in the question.  Most candidates wrote about cheques and so gained no marks.

 Answers should have commented on

electronic/cable/telegraphic transfer of funds, documentary credits, bank drafts or bills of exchange. Credit card was not a viable answer as the payment was such a large amount.

 Some candidates had no knowledge of

teleconferencing and others confused with videoconferencing.  Teleconferencing; using the telephone to hold a meeting of people located in several places.

How might Blazer Cargo Services make the advertisement shown in figure more persuasive?

should have mentioned such

points as changing fonts, emboldening parts of the advertisement, including discount, introducing special offers and providing more information.

 Some candidates thought that collective advertising

encompassed advertisements of types or brands of milk instead of milk as a product.

Describe three general functions of any kind of warehouse.  such as storage, protection, preparing for sale,

stabilising prices or breaking bulk

Explain why they cannot insure their shops against the risk of bad management.  Due to lack of statistics, no past records and inability

to assess the risk.

 showing little knowledge of bank drafts, forwarding

agents and export agents.  confused a bank draft – a cheque drawn by a bank on itself or another bank – with an overdraft.

 forwarding agents – responsible for arranging the

transport, insurance, storage,  documentation of exported goods and export agents – responsible for finding buyers, having specialist knowledge of a country and earning commission.

 Point-of-sale is advertising where the customer will see

it when purchasing goods e.g. at the till.  A regional distribution centre is a warehouse positioned to supply several branches of the supermarket with a given area so that the supermarkets maintain their supplies.

Explain the trends that have contributed to the decline of the wholesaler.  The growth of large-scale retailing, manufacturers

opening their own retail outlets, the growth of mail order and improvements in transport and communication.

In what circumstances is a wholesaler still likely to be used by retailers?  voluntary chains, cash and carry, foreign traders and

the needs of the small-scale retailer.

 the port authority was often confused with a customs

authority  There was some confusion about public limited

companies – ownership by the government was a common error.

 some candidates confused a night safe with an ATM.

In what circumstances would a building company make use of a bank loan rather than a bank overdraft?  bank loan ;the need for a large amount, for a specific

purpose e.g. a new machine, expansion and for a long period

 why the building company might use them to finance

a project e.g. to save paying interest, no repayment, no liability and to finance the project more quickly.

 Many failed to focus on difficulties of trading in world

markets such as distance, currency, payments, transport or customs

 packaging ;the need for protection, aiding storage,

enabling branding and information to be put on the packaging and helping to attract customers.

 Direct debit is used to make variable or fixed payments

to a regular supplier. It saves on clerical work and time and the payee often demands that debts are paid in this way as the transaction can be computerised and the amount paid can vary.

Describe the advantages and disadvantages of using ro-ro ferries for the transport of freight between neighbouring countries.

 that vehicles are driven on board without unloading

them which speeds up the handling of cargo, increases the use of containers, reduces transport costs across short sea channels and expands international trade.

 The disadvantages of using ro-ro ferries are; possible

unemployment among dock workers, the increased risk of terrorism; illegal immigrants using the ferries, import of illegal goods via the ferries and risks associated with the weather.

 Many candidates are still not clear about the

distinction between government owned organisations and those privately owned. A public limited company is in the private sector and so is privately owned.

Explain the purposes of a wholesale warehouse in the chain of distribution.  should have mentioned storage, protection, display,

cash and carry, keeping retailers supplied, bulk breaking and preventing shortages and price fluctuations.

Which medium would be the most cost-effective for advertising a local restaurant? A magazines B posters C radio D television

 The correct answer was option B the cheapest method

and therefore the most suitable for a local business which has to control its costs

 crossed cheques being safer because they could not be

cashed but had to be paid into a bank account were usually made, that they could be specially crossed.

Explain how the accountant might make use of Internet banking.  setting up accounts for the company, making

payments, transferring funds between accounts, calling up statements on bank accounts and obtaining information about bank services.

 why Bing Ltd offered credit – higher turnover, loyal

retailers,  building up goodwill between Bing Ltd and its customers.

 consequential loss was not known –  to cover loss of profits and costs as the result of

business closure because of a calamity such as a fire.

Giving reasons for your choices, recommend a source of finance given in Fig. 3 that the multinational company might use to: (i) update its computer system [3] (ii) build a new factory in another country [3] (iii) improve its cash flow.

 Retained profit or a bank loan were

the most appropriate sources of finance for  the computer system. The overdraft and trade credit were not suitable as the computer system was for the  whole company and so a very large sum of money was involved.

 Long-term finance such as ordinary

shares, a bank loan, retained profits or debentures were required for part (c)(ii) where again a large sum of money was required. In part (c)(iii) trade credit or an overdraft were the correct answers. Candidates often  gave long-term finance such as shares as answers for this part question.

Suggest ways in which she could make a profit.  controlling costs, offering a quality service and

building  up gradually as ways of making profits and showed that they understood the context of the question.

 Public corporations were confused with public limited companies.  the role of a consumer council; to report on unfair business practices  How might consumers protect themselves against unfair trading           

practices by retailers? By being more watchful and aware of what they are buying By watching consumer programmes By reading consumer magazines e.g. to find the best value for money By reporting unfair trading practices By being aware of government legislation designed to protect them + example of legislation By looking for labels on products e.g. BSI kite mark By using reputable retailers e.g. ABTA travel agents By buying branded goods By telling other people By suing/taking to court

Name important factors to consider when deciding on the location of a small retail business..  Nearness to customers – customers often buy

locally  Availability of labour – may need shop assistants  Availability of transport – customers to come to the shop, labour  Kind of site – close to other shops – on main roads

 Ease of obtaining supplies – near main

roads, delivery area  Close to/away from competition especially large-scale retailers – may have to rely  on nearby customers  Cost of location  Planning rules

Mrs Chang owns a general wholesale business. The business is facing competition from manufacturers selling directly to retailers. Explain why many manufacturers now sell directly to retailers.

 They wish to sell in large quantities  They are able to trade at favourable prices (large trade       

discount) They wish to save the costs of a middleman They are trading in perishables/technical/large products Many retailers are large-scale and wish to trade in large quantities and have the storage for them Many manufacturers deal in branded goods which are standardised as regards size and quality Many manufacturers advertise nationwide and so create the market for their products Improvements in transport and communications have made it easier and faster for manufacturers to deliver goods Selling low priced goods/selling goods which cannot go through chain of production

State and explain two actions Mrs Chang might take to survive this competition.  Develop into a specialist wholesaler concentrating on one         

particular commodity Try to reduce costs e.g. labour Form a voluntary chain with small-scale retailers Open the warehouse to card carrying customers from the general public Encourage small-scale retailers as customers - discounts, special offers, frequent delivery services, more credit (2 max) Concentrate on seasonal products/perishables e.g. fruit, fish Advertising campaign Change business e.g. mail order, sell on-line Improve quality of goods

 point-of-sale advertising, advertising at the till  why traders may sell at a loss e.g. loss leaders, to

dispose of old stock, to maintain market share  was not always accurate with many candidates  saying road/sea/ship rather than identifying the actual means of transport i.e. truck/lorry and container ship.

 Most candidates recognised that an overdraft was not a

suitable way to increase working capital but very few identified it as an added liability so that it would add to the total of current liabilities.

Explain the advantages of Internet banking to: (i) the customer [4] (ii) the bank.  some candidates confused Internet banking with

shopping on line or wrote about ATMs in this section. Some candidates also thought that customers could physically withdraw or deposit money using the Internet.

 confusing an ATM with a night safe. Few mentioned

that ATMs are often found away from bank premises, at garages or in shops.  Most mentioned the advantages of 24-hour banking.  How computerisation benefits Paradise Supermarket,s customers?  saving time, less errors and less waiting at the till

 confusion about the Balance of Trade and the Balance 

  

of Payments confused visibles (goods) and invisibles (services) the public limited company (in the private sector) with public corporations which are funded and controlled by government.

 weaker candidates confused investment with

borrowing but many appreciated that a loan has to be repaid and that interest is charged on it. Trade credit is not generally understood so many candidates chose the overdraft. It might be suitable as it provides money immediately so bills can be paid and discounts obtained. Trade credit, on the other hand, would enable Jabatan Ltd to pay monthly, use the materials before paying for them and so earn money with which to pay the bills. Trade credit would also help cash flow and enable Jabatan Ltd to build up a good relationship with its supplier.

 Which product would be stored long-term in a

warehouse? A iron ore B soap C timber D tomatoes

 Option B was the correct answer, but many chose

Option A. Although  iron-ore is likely to be stored long-term, it is unlikely to be stored inside in a warehouse.

the function of a customs authority.  collection duties, enforcing quotas, stopping smuggling, supervising bonded warehouses, checking goods and documents and collecting

statistics. keeping statistical records of imports and exports – to help the government calculate its balance of trade and balance of payments and assess its trade policies and calculate its tax

 revenue from import duties  collecting revenue from import duties –

may be ad valorem or specific controlling bonded  warehouses – to enforce the payment of duties. Bonded warehouses provide storage for  dutiable goods on which duty is unpaid  supervising the movement of goods across the country’s borders – preventing smuggling,

 inspecting cargoes, inspecting documents, enforcing embargoes  enforcing quotas - physical limits on amount of goods allowed to be imported to prevent  dumping  may cover immigration – control of people entering the country  may cover quarantine regulations – for animals  enforcing public health regulations – preventing

certain goods being imported e.g. food

port authority  Marks were awarded for such points as providing

warehousing, providing office space, providing security, providing unloading facilities particularly for containers and maintaining waterways and harbours.

the work of an airport authority             

Provides warehousing including bonded warehouses Provides facilities for customs authorities Provides space for air freight companies to run their businesses Provides runways and taxiing areas Provides fire fighting facilities Provides loading and unloading equipment Provides facilities for the repair of aircraft Provides refuelling facilities Provides navigational aids e.g. control tower Provides facilities for handling containers Provides facilities for transport out of the airport e.g. roads, rail link Provides security Provides car parking

insurance documents

 Explain why customers prefer to pay by credit card rather 

     

than by other means of payment. Answers such as it is safer to carry cash and it is easier gained no marks. Answers that gained marks Included can obtain goods immediately but postpone payment do not have to send cash/cheques through the post credit card company offers some protection against faulty goods may be easier to obtain refunds if they return goods can give credit card details at the time of ordering credit card company provides insurance

hour banking. Is she able to do this? Give reasons for your answer.

 Some  candidates thought that Fatima was a member of the bank staff 

    

and that she might be expected to work for 24 hours a day. Some answers were sketchy revealing that the concept of 24-hour banking using electronic technology as opposed to manual labour using bank premises is still not fully understood by all candidates. The word ‘undertake’ in the question may have confused some candidates. Many candidates wrote about night safe and this was given no credit. The better candidates wrote in some detail about ATMs and their functions, Internet banking and sometimes telebanking. Other candidates mentioned the use of credit and debit cards

 State two disadvantages to Frank and Polly of 

   

accepting payment by credit card. have to pay commission to the credit card company delays in receiving payment for goods bad debts because of credit card fraud extra clerical work have to have bank account

 candidates choosing the risks of fire or theft probably

found it more difficult to describe the risk than those  choosing employer’s liability, consequential loss or public liability.

 concepts of forwarding agents and freeports were not

always understood

 trading blocs, in Part (b), as groups of countries

who have made trade agreements with  common tariff barriers. They gave worthwhile examples and also showed the advantages to a country of  belonging to a trading bloc such as more opportunities for trade, easier movement of goods across borders  and better relations with member countries.

 middlemen in wholesale trade was not Understood  the lowest mark-up on goods is likely to be on the

cheapest product  the purpose of bank giro was not understood. It is used for payments to many people such as staff using one cheque. It is not used for monthly bills which are more likely to be paid by direct debit nor for withdrawing money from a bank.

 Containers cannot be used for all types of goods. They

are not suitable for animals, for ca  The purpose of the consignment note was not known in Question 26. A consignment note is used when goods are carried usually by road in hired transport. A consignment note is not used when transporting goods by ship. A bill of lading would be used.rs and for goods in bulk such as oil.

 The main feature of comprehensive motor vehicle

insurance was not understood in Question 29. It covers  both the owner and the owner’s property as well as third parties1

 advantages of selling directly to large-scale retailers –

cutting costs, reducing damage, charging  higher prices or giving greater trade discou

 confused the multiple shop with a shopping centre  the advantages to  customers of using credit cards. Answers that gained

credit were increased turnover, keeping up  with competition, less cash on the premises and also the arguments for not offering credit cards  such as payment of commission, delay in payment, danger of credit card fraud and increased  paperwork.

 the importance of containerisation  how containers protect goods, how quicker

turnaround times are achieved,  how goods can be trans-shipped and how goods are packed at factories and not unpacked until  they reach their destination

 means of payment used on home trade. There  was plenty of choice but candidates often failed to gain

full marks. Such means of payment as  cheques, credit transfer, standing orders, direct debits, bank drafts, credit cards and debit cards  were accepted. The service was mentioned but there was often little description. Some  candidates also

 means of payment provided by commercial banks to

help trade in other countries.  bills of exchange, letters of credit, bank drafts and electronic transfer (cable) transfer of funds and credit card

the developments in banking           

use of credit cards – postponed payment, payment settled monthly, can be paid using the Internet or by telephone use of standing orders and more particularly direct debit – (count as two services) preferred by creditors as they request payment and can avoid bad debts, enables them to computerise their billing and collect money electronically use of debit cards – immediate payment at point of sale, trader assured of payment, no cash or cheques involved Internet banking – can transfer funds between accounts, pay bills without using cash, available 24 hours a day telephone banking – can transfer funds between accounts, pay bills without using cash, pay  credit card bills  use of bank giro – to pay wages, safer than paying by cheque or with cash  use of ATM – for other services besides cash

 A charter flight is a specially hired

flight to carry freight or passengers at a particular time or for a particular journey. An air waybill is a document used to accompany goods sent by air. It gives all the information about the consignment, acts as an advice note and as evidence of a contract of carriage.

 The work of the agent was known by some candidates

but many wrote that the agent bought products and then sold them for profit rather than acting as a middleman bringing buyers and sellers together.

 Many candidates did not understand the concept    

of the regional distribution Centre. Multiples, supermarkets, hypermarkets and chains of department stores have regional distribution Centres. They need them to enable goods to be bought in bulk, then stored and distributed to their branches when needed, often at short notice. They perform the services of a wholesaler and so save the retailer’s costs.

 when wholesalers were not required – when large-

scale retailers buy in bulk direct from  manufacturers, when goods are fragile, technical, very expensive or perishable and when  producers set up their own retail outlets

 three ways in which a sole trader is different from any 

     

other form of business organisation. one owner quick decision making flexibility profits to the one owner no legal formalities when setting up losses borne by the one owner provided by owner

 answers concentrated on imports but did not always

explain why some countries need to export to other countries.  Free trade – trade without restrictions  examples of collateral such as deeds of property

 Some candidates confused seasonal demand i.e.

demand at certain times of the year for seasonal  supply. Some general points were credited. To gain full marks examples needed to be given such  as Christmas cards, summer clothing, winter blankets and foods for festivals. Candidates often  revealed their error by mentioned cold storage of fruits and vegetables to meet customer demand.

 that posters and leaflets were more suitable for a small

shop with limited resources and a smal  fire and theft but often did not  mention reasons for insurance such as protection against financial risks and compensationl number of customers.

 wholesalers were not required – when large-scale

retailers buy in bulk direct from  manufacturers, when goods are fragile, technical, very expensive or perishable and when  producers set up their own retail outlets.

 Methods of payment provided by bank to traders of

international trade  electronic transfer of funds, documentary credits and bank drafts.. Bills of exchange  General points common to many types of retailers such as self service,branded goods and acceptance of credit cards were not given marks.

 a shopping centre; many shops under

one roof and each shop is owned by different individuals.  Central Business District (CBD); town centres  Some candidates seemed to think that insurance would protect someone from having an accident. It offers financial protection not actual protection.

Explain why Miss Solomon should obtain quotations from several insurance companies.  So that she can see what cover each insurance company    

 

offers, what conditions are imposed and what premiums are charged. So that she can compare what is offered and make a more informed choice/find the best cover. As different insurance companies offer different cover for the same risk and often the cost of cover varies. Different insurance companies may apply different conditions e.g. no claims bonus.

Miss Solomon will complete a proposal form provided by the insurance company she decides to use. Why is this necessary?  Because it is the application for insurance cover  She needs to give details of what she wishes to insure, act in    

utmost good faith, tell the truth And any other relevant facts which may affect the insurance premium The insurance company needs the proposal to assess the risk To decide whether or not to accept the risk And to fix the premium to be charged

 Candidates should have mentioned that  the proposal form is the application for insurance.

Details of what is to be insured are given and,  on the basis of that, the risk is assessed and the premium fixed. Comment on utmost good faith was also given credit. Many candidates mistook the proposal form for either the insurance policy  or a claim form for compensation.

Explain two reasons why an insurance company may refuse to provide Miss Solomon with a motor insurance policy.  She has been refused by another company.  She has not declared some relevant fact e.g. that she has recently been involved in an accident (utmost good faith).  She has had convictions for dangerous driving/drink driving and is considered a bad risk.  She is outside the age ranges of the insurance policies offered by the company e.g. too young, too old.

 She may have a poor credit record and so may be unable to pay the premium.  Contribution – already insured with another company  No insurable interest – not her car  Health reasons  Not able to drive  May be very high risk e.g. racing driver, so cover not offered by general insurance companies – need for specialist insurance.

Miss Solomon could use an insurance broker or she could contact several insurance companies to arrange motor insurance. Discuss both options.

Give reasons for your

answer.  Some good discussions of both the insurance broker and insurance companies were seen but  many candidates concentrated their answer on one aspect of the question, usually the insurance  broker. Some candidates thought mistakenly that it was a good idea to insure with several  companies so that you could make a profit from claiming from all of them. This is not allowed  under the principle of contribution. Although it is usual for insurance brokers to be paid commission  by the insurance companies, comment on payment of commission by Miss Solomon was allowed  as it has been found that this may happen.

companies are becoming increasingly important in the global economy.  Many candidates answered this question in relation to

a developing country instead of the global economy. As many of the expected answers could relate to either, such as employment, improved standard of living, improved infrastructure, increased economic growth and payment of taxes, credit was given for this.

 The emphasis in this question was on suitable

products for sending by air transport, not the advantages of sending goods by air. Candidates should have concentrated on reasoning associated with perishable goods, fragile goods, emergency aid, lightweight goods and valuable goods and why these are sent by air.

 improvements made to air  transport such as larger aircraft, more routes, more

airports, the development of cargo planes and  air freight companies, better facilities at airports for handling freight and the growth of the container  trade in air transport.

How would a cold storage warehouse assist international trade?  Explanation of cold storage warehouses (1 mark)  Storage, protection, display, breaking bulk, constant supply    

(2 max) Enables goods to be preserved for a long time awaiting demand or awaiting transport Enables markets to be extended for perishable goods such as flowers, fruit and vegetables So that the export of these commodities has become a very important part of the trade of some countries e.g. New Zealand lamb, South American roses, Maldivian fish

 Instalments are not paid when leasing. Charges are

made by the leasing company.  Good answers mentioned computer systems being likely to become dated and needing  replacement, the leasing agreement including servicing and repairs and the company not having to make a large initial cash outlay.

 the term re-export trade may have  deterred some candidates. Answers to explain its

importance included providing employment,  earning foreign currency, preparing goods for sale and overcoming difficulties of trade with trading  blocs.

 Some candidates could identify the functions of

forwarding agents as specialists in arranging  transport for goods. Others thought, wrongly, that they brought buyers and sellers together  for trading purposes.

 identify and explain two difficulties that exporters may

have when sending  goods to another country. Language, currencies and distances were often considered.

Why do many port authorities provide container terminals?  This question proved to be quite difficult. Many candidates wrote about the advantages of using  containers rather than container terminals. Container terminals are provided because much of  global trade is shipped in containers, shipping companies want quick turnaround of ships, the cost  of dock labour is saved and they provide a secure environment for stacking containers awaiting  transport.  Definition of container terminal = 1 mark  Because much of the world’s traded goods is shipped in containers.  Which require specialised handling at docks.  Because the port wishes to attract container ships to use its docks.  Because shipping companies want a quick turnaround time for their ships.  Because facilities need to be available for containers to be stacked in secure conditions  ready for loading on to ships.  Saves costs of dock labour.  Provides security.

 confused ports with airports. Most candidates had no

difficulty presenting a  list of services provided by ports such as deep water access, warehousing, office buildings, repair  facilities, refuelling, provisioning, wharves and jetties, pilots, lighthouses and tugs as well as  security.

When differences are required, it is important that clear differences are shown. It is not enough to say, for example, that currencies are the same for home trade and then to say that currencies are different for foreign trade. It is important to say how they are different.

 confusion with Balance of Trade. Visible trade is trade

in goods. Examples were  awarded marks.

how the country might increase its export trade,  encourage firms to be as efficient as possible so that they   

  

can compete on price • government offers awards and incentives to exporters e.g. subsidies • government makes trade agreements with other countries • government joins a trading bloc for the benefits of free trade e.g. EU • reduce export duties • encourage more entrepot trade • encourage manufacturing for export.

 offering credit increased sales, many assumed that  retailers earn interest on offering credit. This is not so.

Any interest paid by a customer would go  to the organisation offering the credit facilities e.g. a finance house or a bank. Good candidates  were able to appreciate that the retailer would have faster turnover of stock and competitive  advantage.

 hypermarkets are located in outside city centres.

Work of forwarding agents  arrange the form of transport  • arrange the documentation  • arrange storage if necessary

 • organise the container  • organise customs clearance  • organise insurance

 • deliver goods to destination  • load/unload consignment  • prepare consignment.

You wish to use an ATM at the bank where you have an account. What will you need?

 Pin number, plastic card/cash card/credit card/debit

card.  Candidates who stated a bank card, plastic card or ATM card gained no marks. Pin number was correct, password was not.

 Candidates often failed to make a clear distinction

between a bank statement issued by a bank and  a statement of account issued by a trader to a buyer purchasing on credit.

services provided by Internet or telephone banking. Many candidates wrote about shopping online and others failed to describe the service listed.

 Commercial banks offer a range of automated services. Many

    

  

people use the Internet to conduct their bank business. Some people use telephone banking. Most people use bank machines for a variety of purposes but mainly to obtain cash. It is likely that some bank branches will close in some towns or city centres; especially where there is duplication. Kiosks of banking machines such as ATMs may be more available in more locations in city centres but many people will still need to visit their banks. They may not go so frequently but they may need to talk to someone about a loan, need to deposit money in a night safe, want to obtain information or just to pay in or obtain cash. It is, therefore, unlikely that there will be total closure of bank branches.