Question
ABC is a US company that has a manufacturing subsidiary in Brazil. There have been large changes in the USD/BRL exchange rate over the last
ABC is a US company that has a manufacturing subsidiary in Brazil. There have been large changes in the USD/BRL exchange rate over the last 5 years and the company has forecasted the following possible exchange rates and subsidiary values over the next year:
ProbabilityUSD/MXNValue (MXN)Value ($)
State 1.20 $1 = 18.2 MXN60,000,000 3,296,703
State 2.20$1 = 19.2 MXN55,000,000 2,864,583
State 3.20$1 = 20.2 MXN 52,000,000 2,574,257
State 4.20$1 = 21.2 MXN49,000,000 2,311,321
State 5.20$1 = 22.2 MXN44,000,000 1,981,982
Find the exchange exposure coefficient faced by ABC for its Brazilian subsidiary (i.e., find the b estimate from a regression)
I believe I have to use the LINEST function in excel, but I am not 100% how to do so for this problem. I am practicing for an exam tomorrow and I would really appreciate any help!
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