Bilateral netting can reduce the number of foreign exchange transactions among an MNC with N affiliates to

Question

Quizplus · Accepted Answer

Bilateral netting involves offsetting payments and receipts between two affiliates of an MNC, which means that each pair of affiliates only needs to carry out one foreign exchange transaction instead of two. There are N(N-1)/2 possible pairs of affiliates, which means that by using bilateral netting, the number of foreign exchange transactions can be reduced to N(N-1)/2. Therefore, the correct choice is C.

Bilateral Netting Can Reduce the Number of Foreign Exchange Transactions N!(N−1)!2\frac { N ! ( N - 1 ) ! } { 2 }2N!(N−1)!​

Bilateral Netting Can Reduce the Number of Foreign Exchange Transactions $\frac { N ! ( N - 1 ) ! } { 2 }$