In Terms of Foreign Exchange,which of the Following Is True

question 55

Multiple Choice

In terms of foreign exchange,which of the following is true of leading and lagging strategies?

• A) They primarily protect long-term cash flows from adverse changes in exchange rates.
• B) They are used to minimize economic exposure of companies.
• C) They can help firms minimize their transaction and translation exposure.
• D) The involve accelerating payments from strong-currency to weak-currency countries.
• E) They are limited by governments because they create pressure on strong currencies.

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Definitions:

Deposits

Funds placed into an account at a financial institution, often earning interest.

Interest

The cost of borrowing money or the payment received for lending money, often expressed as a percentage of the principal.

Savings

Money that is set aside for future use rather than being spent immediately, often with the aim of achieving longer-term financial goals.

Retire

In finance, it often refers to the paying off or buying back of debt or securities, implying the removal of these items from the financial markets.