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

Question

Quizplus · Accepted Answer

All of the given answers (A, B, C) are strategies used to manage transaction exposure. Leading and lagging foreign exchange transactions involve adjusting the timing of payments and receipts to take advantage of favorable exchange rate movements. Buying or selling foreign exchange in the forward market allows firms to lock in exchange rates for future transactions. Borrowing in foreign currency markets while using foreign currency receivables as collateral is a way to hedge against exchange rate fluctuations. All of these strategies can be used to manage transaction exposure.

Which of the Following Are Strategies Used to Manage Transaction