In terms of foreign exchange, what 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) They involve accelerating payments from strong-currency to weak-currency countries.
E) They are limited by governments because they create pressure on strong currencies.

Question

Quizplus · Accepted Answer

Leading and lagging strategies can help firms minimize their transaction and translation exposure by timing payments and receipts to take advantage of favorable exchange rate movements.

In Terms of Foreign Exchange, What Is True of Leading