World Market risk premium = 6% Sensitivity of slapshot to world market = 1.2 Sensitivity of slapshot to changes in the (UK/CDN$) exchange rate = 1.4 Expectation for the depreciation of the CDN$ against the UK = 2% Suppose the CDN$ suddenly depreciates by 10% against the UK. Given his estimated parameters, what is the most likely to happen to the local currency value of slapshot in response to this sudden exchange rate change? A) Local currency value would fall by 10% B) Local currency value would fall by 4% C) Local currency value would increase by 10% D) Local currency value would be unchanged
need the local Rf rate i would think to to use ICAPM or if somehow fundamental model A or B