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Which of the follow statements is FALSE? Olf a currency is depreciating, a firm can use the lead and lag strategy to reduce its transaction
Which of the follow statements is FALSE? Olf a currency is depreciating, a firm can use the lead and lag strategy to reduce its transaction exposure by paying the obligations denominated in the depreciating currency as late as the contracts will allow. O Facing a depreciating currency, the firm should give incentives to its customers who owe the firm in that currency to pay late. Olf a currency is appreciating, it is beneficial for a firm to pay its bills denominated in that currency early and let customers in that country pay late as long as they are paying in that currency. O When the competition is intense, the lead and lag strategy may be infeasible to deploy. However, a multinational company can aggressively use the lead and lag strategy to deal with intra firm payables and receivables. Question 6 1 pts Will a domestic firm, say a bicycle manufacturer, that sources, produces, and sells only in the U.S be impacted by FX fluctuation? i. Yes, if the firm's product competes against imported bicycles. ii. Yes, because the firm's customers are comparing the cost and features of the domestic bicycles against imported foreign bicycles iii. No, because changes in exchange rates only affect firms that are directly engaged in international trade, but not purely domestic firms. iv.The domestic firm will only be negatively impacted if the dollar is depreciating again the currencies whose countries export bicycles to the United States O i, ii, and iv. Oil O Both i and ii. Oi oiii 56F Cloudy BI Tax m )
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