Which will reduce the number of foreign exchange transactions the most for an MNC?

Question

Quizplus · Accepted Answer

Multilateral netting allows multiple subsidiaries within an MNC to offset their payables and receivables with each other, resulting in fewer transactions that need to take place. This reduces the need for foreign exchange transactions and therefore reduces related transaction costs, currency risks, and potential currency losses. Bilateral netting only allows for two subsidiaries to offset their payables and receivables, which may not cover the entire MNC's operations. Fish netting is not a financial term and is not related to reducing foreign exchange transactions.

Which Will Reduce the Number of Foreign Exchange Transactions the Most