The Following Regression Model Was Run by a U $\mu$ _t
Where the Term on the Left-Hand Side Is the to Determine

question 25

Multiple Choice

The following regression model was run by a U.S.-based MNC to determine its degree of economic exposure as it relates to the Australian dollar and Sudanese dinar (SDD) : PCF_t = a₀ + a₁e_t + $\mu$ _t
Where the term on the left-hand side is the percentage change in inflation-adjusted cash flows measured in the firm's home currency over period t, and e_t is the percentage change in the exchange rate of the currency over period t. The regression was run over two subperiods for each of the two currencies, with the following results:
Based on these results, which of the following statements is probably not true?

• A) The MNC was more sensitive to movements in the Australian dollar than in the dinar in the earlier subperiod.
• B) The MNC was more sensitive to movements in the dinar than in the Australian dollar in the more recent subperiod.
• C) The MNC probably had more outflows than inflows in Australian dollars in the earlier subperiod.
• D) The MNC probably had more inflows than outflows denominated in dinar in the more recent subperiod.
• E) All of the above are true.

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Definitions:

Stereotype Lift

A phenomenon wherein individuals from non-stereotyped groups perform better in situations where their counterparts are negatively stereotyped.

Stigma Consciousness

The awareness or sensitivity to the stigma one might face based on an attribute, identity, or status, affecting how one navigates social interactions and perceives oneself.

Discrimination Discrepancy

A difference or inconsistency in the treatment of individuals or groups based on characteristics such as race, gender, or age.

Superordinate Goal

An objective shared by individuals or groups that requires their cooperation to achieve, often used to reduce conflict between competing parties.