Pregunta
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Whole numbers solving Problems: FINANCE Nyakallo checks the newspaper and sees that the exchange rate between the South African rand ( R) and the Kenyan shilling (K) is R \( 1=\mathrm{K} 10 \). 1. Choose the exchange rate that represents a weaker rand (against the shilling). Answer: R \( 1=\mathrm{K} 5 \) R \( 1=\mathrm{K} 13 \) R \( 2=\mathrm{K} 20 \) Final check

Ask by Perkins Collins. in South Africa
Feb 04,2025

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The weaker rand is represented by **R 1 = K 5**.

Solución

To determine which exchange rate represents a **weaker** South African rand (R) against the Kenyan shilling (K), let's analyze each option based on the initial exchange rate provided: **Initial Exchange Rate:** - **R 1 = K 10** This means that **1 Rand** is equivalent to **10 Kenyan Shillings**. A **weaker rand** implies that each rand buys **fewer** Kenyan shillings compared to the initial rate. Let's evaluate each option: 1. **Option A: R 1 = K 5** - **Analysis:** Here, 1 Rand buys only 5 Kenyan Shillings. - **Conclusion:** Since each rand now buys fewer shillings than before (5 < 10), the rand has **weakened**. 2. **Option B: R 1 = K 13** - **Analysis:** Here, 1 Rand buys 13 Kenyan Shillings. - **Conclusion:** Each rand now buys more shillings than before (13 > 10), indicating the rand has **strengthened**. 3. **Option C: R 2 = K 20** - **Analysis:** This can be broken down to R 1 = K 10. - **Conclusion:** This rate is **identical** to the initial exchange rate, so the rand's value remains **unchanged**. **Final Decision:** - The exchange rate that represents a **weaker rand** is: **Answer:** **R 1 = K 5**

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The Deep Dive

A weaker rand against the Kenyan shilling means that it takes more rand to equal one shilling, indicating that the rand has lost value. Thus, R \( 1=\mathrm{K} 13 \) reflects a weaker rand, as it requires more Kenyan shillings to equal the same amount of rand compared to the original rate. In finance, when dealing with exchange rates, always visualize it as a seesaw: if one side goes up—representing a higher value—you can expect the other side to go down. So, if the rand weakens, the shilling gains strength, tugging the exchange rate up!

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