Mark expects the value of currency X to appreciate in the near future. Hence, he delays the collection of payments from foreign customers until the next month. Which tactic is Mark making use of to minimize the foreign exchange exposure

Question

Business

Asher Duke

27 January, 07:58

Mark expects the value of currency X to appreciate in the near future. Hence, he delays the collection of payments from foreign customers until the next month. Which tactic is Mark making use of to minimize the foreign exchange exposure

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Answers (1)

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Carleigh Livingston · Answer 1

Lag startegy

Explanation:

Mark is using Lag Strategy to minimize the foreign exchange exposure.

Lag Strategy refers to a situation of adding capacity only after the company is running at full capacity or beyond caused by an increase in demand. This strategy is conservative strategy. It reduces the risk of waste but then it could bring about a loss of possible customers.