A U .S. firm holds an asset in Great Britain and faces the following scenario: Probability Spot rate where, State I 2500 $2.20 E e,ooo $4,400 State 2 5000 $2.00 E E2,500 $5,000 State 3 2500 $1.80 E E3,ooo $5,400 P* = Pound sterling price of the asset held by the U.S. firm P = Dollar price of the same asset