The table below depicts the three possible values of future spot exchange rate and your foreign assets.You used the simple regression model to estimate of the effect of the exchange rate on the assets' value.Find the estimated slope of this regression b. State Prob.P* S($/£)P(=SP*)
1 1/3 £1059 1.7 $1,800
2 1/3 £1,000 1.8 $1,800
3 1/3 £947 1.9 $1,800

Question

Quizplus · Accepted Answer

Because P(=SP*) is not changing across the provided scenarios, the slope of this regression would be 0.

The Table Below Depicts the Three Possible Values of Future