The Venezuelan Government Officially Floated The Venezuelan Bolivar Bs In February 2 2459940

The Venezuelan government officially floated the Venezuelan Bolivar (Bs) in February 2002. In March 2002, its value had moved from the prefloat fix of Bs780/$ to Bs1000/$

(b) If the Bolivar would fall an additional 25% (in terms of $ value) from it

Let the new FX rate be X Bs/$ (1000-X)/X = -0.25 (note that Bs is the numerator currency) ->> 0.75X = 1000 —–> X = 1,333.33 (Bs/$)

I’m having trouble seeing how my professor got this answer? wouldnt you need to multiple x on both sides to get rid of the fraction so it would be 1,000-x= -.025x

but then if you continue the math then it would not come out to the answer my professor got.

Prof. Angela


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