Hong Kong was a British territory for approximately 150 years before being handed back to China in 1997. It is now a Special Administrative Region of China. The Hong Kong dollar is pegged to the United States dollar with US$1 in the range HK$7.75 7.85 as the peg.

1, Explain why the Hong Kong dollar is a pegged currency.

2, State the currency of China and explain why Hong Kong does not use the currency of China as its currency.

3, For the peg, find the value of HK$1 in the range of United States dollars.

4, Explain why Hong Kong is an international finance hub.