Consider that a basket of goods in Johannesburg is worth ZAR 5000 (5000 rands) while the same basket of goods is worth K7500 (7500 kwacha) in Zambia. A check for the displayed exchange rates at one of the FnB branches in Lusaka revealed that ZAR1 (1 rand) can be exchanged for K1.16. Based on the foregoing establish the nominal exchange rate and the real exchange rate between the kwacha and the rand. Comment on your estimates in the face of international trade between Zambia and South Africa
Consider that a basket of goods in Johannesburg is worth ZAR 5000 (5000 rands) while the same basket of goods is worth K7500 (7500 kwacha) in Zambia. A check for the displayed exchange rates at one of the FnB branches in Lusaka revealed that ZAR1 (1 rand) can be exchanged for K1.16. Based on the foregoing establish the nominal exchange rate and the real exchange rate between the kwacha and the rand. Comment on your estimates in the face of international trade between Zambia and South Africa
A commercial Bank in Zambia has a net profit after taxes of K10 million with an asset base of K100 million. It is also noted that the equity capital investment for the bank amounts to K20 million. Based on the foregoing, calculate the Return on Equity (RoE) and Return on Assets (RoA). Ensure to also comment on the relationship between the two performance parameters ROE and ROA.
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