A Lag Strategy Involves

question 63

Multiple Choice

A lag strategy involves

• A) attempting to collect foreign currency receivables early when a foreign currency is expected to depreciate.
• B) delaying collection of foreign currency receivables if that currency is expected to appreciate.
• C) paying foreign currency payables before they are due when a currency is expected to appreciate.
• D) delaying collection of foreign currency receivables if that currency is expected to depreciate.

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Definitions:

Per-Unit Tax

A tax imposed on a product on a per unit basis, raising the cost of production or sale for that product.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the incremental rate applied to income in the highest tax bracket.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (income, expenditure, or asset), represented as a percentage.

Proportional

Characterized by or corresponding in size, degree, or intensity according to a fixed ratio or relationship.