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 the regression equation $P = a + b \times S + e$ is

Question

Quizplus · Accepted Answer

The coefficient b in the regression equation measures the sensitivity of the dollar value of the British asset to changes in the dollar/pound exchange rate, which is known as asset exposure.

From the Perspective of the U P=a+b×S+eP = a + b \times S + eP=a+b×S+e

From the Perspective of the U $P = a + b \times S + e$