The Malaysian ringgit peg to the U.S. dollar. Malaysia pegs its currency, the Malaysian ringgit (MYR), to the U.S. dollar. The par value is MYR 4 = 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?