When a company has receipts & payments in the same foreign currency due at the same time, it can use technique of managing foreign exchange risk.

Question

Quizplus · Accepted Answer

Exposure netting (matching) is a technique used by companies to manage foreign exchange risk by offsetting exposures in the same currency, effectively reducing the net exposure to currency fluctuations. This is done when receipts and payments are in the same foreign currency and are due at the same time, allowing the company to balance out the transactions without needing to engage in additional currency exchanges.

When a Company Has Receipts & Payments in the Same