a. How can a U.S. company use regression analysis to assess its economic exposure to fluctuations in

Question:

a. How can a U.S. company use regression analysis to assess its economic exposure to fluctuations in the British pound?
b. In using regression analysis to assess the sensitivity of cash flows to movements, what is the purpose of breaking the database into subperiods?
c. Assume the regression coefficient based on assessing economic exposure was much higher in the second subperiod than in the first subperiod. What does this tell you about the firm’s degree of economic exposure over time? Why might such results occur?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...