Which of the Following Are Strategies Used to Manage Transaction

question 67

Multiple Choice

Which of the following are strategies used to manage transaction exposure?

• A) Leading and lagging foreign exchange transactions
• B) Buying or selling foreign exchange in the forward market
• C) Borrowing in foreign currency markets, using foreign currency receivables as collateral
• D) All of the given answers

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Definitions:

Fixed Costs

Expenses that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.

Variable Cost

Costs that change in proportion to the goods or services that a business produces.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment by summing the present values of all cash inflows and outflows associated with the investment.

Tax Credit

A direct reduction of the tax liability, not merely a reduction of taxable income.