a. 
$25.00


b. 
$17.39


c. 
$23.81


d. 
$20.00

a. 
undertake an intervention in the currency market if the US dollar approaches the lower bound.


b. 
convert or exchange US dollars for the euro at any time at a stated fixed price because the euro is the anchor currency of the US dollar.


c. 
undertake an intervention in the currency market if the US dollar approaches the upper bound.


d. 
undertake an intervention in the currency market if the euro approaches either the upper or lower bound.

Expected Dividend = $20
Expected Share in Liquidated Assets = $5
Total Expected Return (fv) = $20 + $5 = $25
Value of $1 after 1 Year is $1.05, therefore the present value factor is 0.05
Calculation of the present value of return is as follows:
The present value of the returns is highest amount we will be willing to pay for the purchase o the share of a company.
Hence, the option C is correct.
Currency Board:
Currency Board is a medium or institution that helps countries to convert their currencies at a fixed rate into a reserved asset. The currency board should have 100% reserves of foreign currency which provides full convertibility.
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