The Chinese Government's Official Position on the Value of the Yuan

Multiple Choice

The Chinese government's official position on the value of the yuan renminbi is that it is neither overvalued nor undervalued, so there is no expectation that the fixed exchange rate will change from its current value of CNY8.28/$ anytime soon. However, many Western currency traders believe that the Chinese government will soon be forced to revalue the yuan by at least 15 percent. What exchange rate would reflect a 15 percent revaluation of the yuan renminbi?

A) CNY9.74/$
B) CNY7.20/$
C) CNY9.52/$
D) CNY7.04/$
E) None of the above.