Malaysia pegs its currency, the Malaysian ringgit (MYR), to the U.S. dollar. The

par value is MYR4 = US$1.

a. What is the par value priced in US$ terms for MYR 1?

b. Bank Negara decides to widen the tunnel of allowed fluctuations authorized to

+/7.50 percent around its par value. What are the new ceiling and floor

exchange rates?

c. Assume that the MYR revalues by 15 percent against the US$. What is the new

par value? What are the new ceiling and floor exchange rates?

Malaysia pegs its currency, the Malaysian ringgit (MYR), to the U.S. dollar. The par value is MYR4 = US\$1. a. What is the par value priced in US\$ terms for MYR 1? b. Bank Negara decides to widen the tunnel of allowed fluctuations authorized to +/7.50 percent around its par value. What are the new ceiling and floor exchange rates? c. Assume that the MYR revalues by 15 percent against the US\$\$. What is the new par value? What are the new ceiling and floor exchange rates