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CTP · Question #456
(Topic 5) A United States corporation purchases finished products from a German subsidiary and sells raw materials to the subsidiary several times in one month. To minimize foreign exchange…
The correct answer is A. bilateral netting. See the full explanation below for the reasoning.
Question
- (Topic 5)
A United States corporation purchases finished products from a German subsidiary and sells raw materials to the subsidiary several times in one month. To minimize foreign exchange transaction costs, the U.S. corporation's cash manager would MOST LIKELY use:
Options
- Abilateral netting.
- Bmultilateral netting.
- Cforward options.
- Dpooling.
How the community answered
(47 responses)- A74% (35)
- B15% (7)
- C4% (2)
- D6% (3)
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