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sp=b0+b1e+ Where SP represents the percentage change in Laytoris stock price per quartec, e represents the percentage change in the yen value per quarter, and

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sp=b0+b1e+ Where SP represents the percentage change in Laytoris stock price per quartec, e represents the percentage change in the yen value per quarter, and is an error term. Based on the analysis, the b0 coefficient is zero and the b1 coefficient is 0.4 and is statistically significant. Layton believes that the inflation differential has a major effect on the value of the yen (based on purchasing power parity). The inflation in Japan is expected to fall substantially while the U.S. Inflation will remain at a high level. Would you expect that Layton's value to be favorably affected, unfavorably affected, or not affected by its economic exposure over the next quarter? Explain. Based on purchasing power parity, the relatively low inflation in lapan will place percentage change in Layton's stock price affected. related to e and, therefore, the value of the stock will , the

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