A foreign subsidiary of ABC Company is expecting its local currency to fall in value relative to the U.S.dollar.As a result,ABC is trying to speed up,or ________ its payments to the parent.
A)lead
B)lag
C)reinvoice
D)net
E)hedge

Question

Quizplus · Accepted Answer

Leading payments means making payments earlier than the usual or agreed-upon time. In this case, ABC Company's foreign subsidiary is trying to speed up its payments to the parent company in anticipation of the local currency's fall in value relative to the U.S. dollar. By doing so, the subsidiary can minimize the impact of the currency's depreciation on its payments to the parent company. This strategy is also known as currency risk management.

A Foreign Subsidiary of ABC Company Is Expecting Its Local