You have been asked to assess the economic exposure of SFC Corp. using the following regression:

r_t = a + * e_t + u_t

where r_t is the return on SFCs stock at time t, e_t is the percentage change in the dollar value of the Japanese yen at time t (i.e., dollars per yen), and u_t is the regression error term. The regression output shows:

=slope coefficient= -1.20; p-value of slope coefficient = 0.002 ; R-squared= R² = 0.55

a) (9 points total; 3 each part) Provide an interpretation of the regression output, explaining: i) the p-value, ii) the slope coefficient, and iii) the R-squared.

b) (3 points) Based on the regression output, does SFC Corp. stock respond negatively or positively to an appreciation of the U.S. dollar? Explain.