Question: How to get step 4 Example: Suppose that U. S. firm has an asset E1 = $1.4 E 980 In france . The local price

How to get step 4

Example: Suppose that U. S. firm has an asset E1 = $1.4 E 980 In france . The local price of asset Is random Step # 1 State Probability S statel E 980 $ 1. 4/ E $ 1372 state 2 wH $1.5/E $1506 state 3 E107o $16/6 $ 1712 Estimate the US firm exposure to e risk Prob Answer 6 = aDE[ P - () ) (s , - 5 ) ] Minimum 91 E ( Si -(3)7 Steps stept 1 Pi 1372 + 1500+ 1712 step # 2 P = = $ 15 28 3 Step +3 5 = 1.4 + 1.5 + 1.6 1.5 3 step + 4 b =

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