In the Equation Profits = a + B × ($/₤

Multiple Choice

In the equation Profits = a + b × ($/₤ exchange rate) , b is a measure of

A) the firm's beta when measured in terms of the foreign currency.
B) the ratio of the firm's beta in terms of dollars to the firm's beta in terms of pounds.
C) the sensitivity of profits to the exchange rate.
D) the sensitivity of the exchange rate to profits.
E) the frequency with which the exchange rate changes.