A subsidiary that uses the leading srategy in managing its foreign exchange risk is expected to lose interest receivable and incurs charges on funds led.

Question

Quizplus · Accepted Answer

The leading strategy for managing foreign exchange risk is hedging, which involves buying or selling financial instruments such as forward contracts or options to offset potential currency fluctuations. This may result in losing some interest receivable or incurring charges on funds lent, but it can also mitigate the risk of significant losses due to changes in exchange rates.

A Subsidiary That Uses the Leading Srategy in Managing Its