You are driving past a line of parked cars. You notice a ball bouncing out into the road ahead. What should you do?

New Zealand's traffic rules place a strong emphasis on safety, aiming to protect all road users, including drivers, pedestrians, and unpredictable factors such as children chasing a ball into the road. The correct option for the aforementioned issue highlights the cautious practices that should be adopted when potential risks are identified while driving.

Therefore, option 2: "Reduce speed and prepare to stop safely," reflects the need to slow down and be ready to stop when encountering unexpected situations.