The rate that a subsidiary or parent of the MNC charges other divisions of the firm for its products is called

Question

Quizplus · Accepted Answer

The correct term used to describe the rate that a subsidiary or parent of the MNC charges other divisions of the firm for its products is a transfer price. Choice A is incorrect because a forward price is a contract to buy or sell assets at a future date for a specified price. Choice B is a broad term that refers to transactions that occur within a company, but it does not specifically refer to transfer pricing. Choice D is incorrect because an exchange rate is the rate at which one currency can be exchanged for another.

The Rate That a Subsidiary or Parent of the MNC