Tarheel Co. plans to determine how changes in U.S. and Mexican real interest rates will affect the

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Tarheel Co. plans to determine how changes in U.S. and Mexican real interest rates will affect the value of the U.S. dollar.

a. Describe a regression model that could be used to achieve this purpose. Also explain the expected sign of the regression coefficient.

b. If Tarheel Co. thinks that the existence of a quota in particular historical periods may have affected exchange rates, how might this be accounted for in the regression model?

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International financial management

ISBN: 978-0324593471

9th Edition

Authors: Jeff Madura

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Question Posted: Jun 04, 2012 07:54 AM

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Tarheel Co. plans to determine how changes in U.S. and Mexican real interest rates will affect the

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a Various models are possible One model would be Change a 0 a 1 r US r M u in peso Where r ...View the full answer

International financial management

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