A U.S. firm holds an asset in Great Britain and faces the following scenario: Probability Spot rate State 1 25% $ 2.20/ 2,000 $4,400 State 2 50% $ 2.00/ 2,500 $5,000 State 3 25% $ 1.80/ 3,000 $5,400 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) is Hint Calculate the expression Cov{P, S) VAR(S)