From the perspective of the U.S.firm that owns an asset in Britain,the exposure that can be measured by the coefficient b in regressing the dollar value P of the British asset on the dollar-pound exchange rate S using regression equation P = a + b × S + e is

Question

Quizplus · Accepted Answer

Asset exposure is directly related to the change in the value of foreign assets due to fluctuations in the exchange rate, which is what the regression equation P = a + b × S + e is designed to measure.

From the Perspective of the U