A U.S. firm holds an asset in Great Britain and faces the following scenario State 2 50% State 3 25% Probability Spot rate State 1 25% $ 2.20 3,000 $ 6,600 $ 2.00 / $ 1.80 1 2,500 5,000 2,000 $ 3,600 P $ where, p* = Pound Sterling price of the asset held by the U.S. firm P = Dollar price of the same asset The "exposure" (i.e. the regression coefficient beta (b)) is Hint: Calculate the expression b = Cove S/Var(s) -2,500 none of the options 2,500 0 7,500