I need help studying for my International Finance Final, this is one of the review questions:

A US MNC tries to sell off its assets in France and retain US dollars back. Now the company is facing three scenarios, and the euro value of its French assets and the exchange rate under each scenario is indicated in the table below.

(a)Please answer the dollar value of the company's French assets under each case.

State Probability Euro Value Exchange Rate Dollar Value

Scenario 1 1/3 900 $1.35/ _________

Scenario 2 1/3 1,000 $1.50/ _________

Scenario 3 1/3 1,100 $1.65/ _________

(b)Please solve for the economic exposure of the company's French assets. In other words, how does the change of exchange rate affect the dollar value of the assets. To answer this question; build a model:

Dollar value of French Assets =alpha + beta* Exchange Rate (then solve for beta)

Hint: use the statistics function of your calculator. Choose linear regression for calculation.

(c)Implication of beta in Financial Hedging

We sell _________ forward at the 1-year forward rate of ________

a.$ net cash flow when the French assets is worth 980, and the exchange rate is $1.35/

b.$ net cash flow when the French assets is worth 1,000, and the exchange rate is $1.50/

c.$ net cash flow when the French assets is worth 1,070, and the exchange rate is $1.65/