When engaged in bilateral netting

Question

Quizplus · Accepted Answer

All of the statements are true when analyzing bilateral netting. The total interaffiliate receipts will always equal total interaffiliate disbursements, and by engaging in bilateral netting, a MNC with N affiliates can reduce foreign exchange transactions to 1/2 N(N-1), or 11ea71d4_b76e_ab17_89cd_a124a459a034_TB2453_11 or less. Additionally, each affiliate will net all their interaffiliate receipts against all their disbursements and then transfer or receive the balance accordingly, making bilateral netting an efficient way to manage internal cash flow within a MNC.

When Engaged in Bilateral Netting