11.

The Venezuelan bolivar (VEF) is currently officially pegged to the U.S. dollar at a rate of $0.10/bolivar. However, in practice no one cares about this pegged rate because capital controls prevent anyone from actually trading at this rate. Without capital controls, investors would bankrupt the Venezuelan government by demanding dollars in exchange for bolivars. Which scenario is consistent with this description?

Group of answer choices

A black market exchange rate of $0.20/VEF because the government peg overvalues the bolivar

A black market exchange rate of $0.05/VEF because the government peg undervalues the bolivar

A black market exchange rate of $0.05/VEF because the government peg overvalues the bolivar

A black market exchange rate of $0.20/VEF because the government peg undervalues the bolivar