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Intro Rockweill Inc. produces computer chips in the U.S. and sells them domestically and in Canada. To measure its economic exposure, the company ran a
Intro Rockweill Inc. produces computer chips in the U.S. and sells them domestically and in Canada. To measure its economic exposure, the company ran a regression analysis to explain the expected percentage change in annual U.S. dollar cash flows (PCF): E(PCF) = 0.017 + 2.1E(et) where E(et) is the expected percentage change in the exchange rate for the Canadian dollar (measured in U.S. dollars per Canadian dollar). Part 1 | Attempt 1/10 for 10 pts. If the Canadian dollar is expected to depreciate by 3%, what is the expected percentage change in annual U.S. dollar cash flows? 4+ decimals Submit Intro Teton Stone and Steel is a U.S. construction firm with sales in the U.S. and Mexico. To measure its economic exposure, the company ran a regression analysis to explain the expected percentage change in annual U.S. dollar cash flows (PCF): E(PCF) = 0.019 + 3.5E(et) where E(e) is the expected percentage change in the exchange rate for the Mexican peso (measured in U.S. dollars per peso). Part 1 | Attempt 1/10 for 10 pts. If the current exchange rate is $0.0462 per peso and the expected exchange rate is $0.0469 per peso, what is the expected percentage change in annual U.S. dollar cash flows? 3+ decimals Submit
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