How changes in uk and euro real interest rates will affect

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Measuring effects on exchange rates. Tarheel Co. plans to determine how changes in UK and euro real interest rates will affect the value of the British pound.

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?

Reference no: EM13936292

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