The advantage of the _____ agreement between the parent and foreign subsidiaries is that if the exchange rate changes, the subsidiary will be not be blamed or credited for the change.
A)forward exchange rate
B)effective interest rate
C)spot exchange rate
D)internal forward rate
E)temporal rate

Question

Quizplus · Accepted Answer

The internal forward rate agreement between a parent company and its foreign subsidiaries is designed to protect the subsidiaries from being blamed or credited for changes in exchange rates. This agreement sets a specific rate for transactions between the entities, insulating them from fluctuations in the external currency market.

The Advantage of the _____ Agreement Between the Parent and Foreign