(Solved) The following regression was conducted for the inflation rate information and exchange rate of the British pound: e_BP=a_0+a_1(((1+I_US))/((1+I_B))-1)+μ
Question: The following regression was conducted for the inflation rate information and exchange rate of the British pound:
\[{{e}_{BP}}={{a}_{0}}+{{a}_{1}}\left( \frac{(1+{{I}_{US}})}{(1+{{I}_{B}})}-1 \right)+\mu \]Regression results indicate the following:
| Coefficient Estimate | Standard Error | |
| Intercept | 0.56 | 0.30 |
| Inflation Differential | 0.45 | 0.20 |
Suppose that the rejection region is values for the t statistic greater than 2.5 and less than -2.5.
Do you have any evidence inconsistent with the Purchasing Power Parity theory?
Deliverable: Word Document 
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