SP = b0 + (b1 x e) + u
The cruise ships are very profitable. You want to measure Bag’s economic exposure to movements in the peso by applying regression analysis to data over the last 60 quarters:
SP = b0 + (b1 x e) + u. Do you think the expected sign of the b1 coefficient in the model above would be positive and significant, negative and significant, or zero (not significant)? Briefly explain.