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Suppose that you ran the following regression: %Change in Cash Flows ($) = a + b (%change in exchange rate) You get the following results

Suppose that you ran the following regression:

%Change in Cash Flows ($) = a + b (%change in exchange rate)

You get the following results (T-Stats in Parentheses)

a = 0.10 ( 0.28 )

b = 2.1 ( 6.11 )

How could you hedge this risk? How exposed is this firm?

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