A subsidiary has noticed that it is possible to obtain a forward exchange contract with a maturity date in $5$ days at an exchange rate which will give the possibility to buy the foreign currency at a lower price than today. Before concluding this forward contract, the subsidiary has had to ask for the permission of its sister company to whom the payment was due today. What is the name of this technic and what are its benefits?

A$.$ This technic is that of multilateral compensation. It aims to better manage working capital and foreign exchange risk. The central treasury department dictates the exchange rates and decides on the date of payment according to the foreign exchange position of the subsidiaries.

B$.$ This technic, called $$leads and lags$,$ is used to better manage the working capital and the foreign exchange risk. In this case, it is a lead the subsidiary is booking an exchange rate today, thus paying today for an amount its sister company has agreed to receive in $5$ days because the latter will receive more money in its national currency.

C$.$ This technic called $$leads and lags$$ is used to better manage the working capital and the foreign exchange risk. It also gives the possibility to generate additional revenues. In this case, it is a lag. The subsidiary has obtained a discount forward exchange rate, allowing it to pay less in its national currency a foreign exchange amount to be remitted to its sister company.

D$.$ This technic is that of multilateral compensation. It aims to better manage working capital and foreign exchange risk. This technic is always used within a centralized treasury. The treasury performs the foreign exchange transactions of the subsidiaries.