The following regression was conducted for the inflation rate information and exchange rate of the British pound:
Regression results taken directly from MS Excel indicate the following:
Coefficient Estimate Standard Error T stat Intercept 0.66 0.11 6.00 Inflation Differential 0.45 0.30 1.50
Suppose that the critical t value is 1.7 or -1.7. Do you have any evidence inconsistent with the Purchasing Power Parity theory? If there is evidence inconsistent with the Purchasing Power Parity theory, please show all evidence inconsistent with the Purchasing Power Parity theory.
Please show all calculations
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