Question
__ is the arrangement whereby the payee grants longer-term credit if his own currency is weakening in relation to that of the payer, again assuming the payer's currency is to be used for the settlement of the transaction. (Select the missing word below to complete the sentence) Lagging C Forward contract Leading Matching
Answer
4.3
(264 Votes)
Daphne
Master · Tutor for 5 years
Answer
Leading
Explanation
## Step 1:Read the complete statement and compare the content with the knowledge about each provided option.## Step 2: Analyze each option:- 'Lagging' is a term which generally relates to late reactions in finance. Doesn't seems suitable in given context.- 'Forward contract' is a contract between two parties to buy or sell an asset at a specified future date. It does not specifically tie in with the context presented in the sentence.- 'Leading' involves the early payment or collection of receivables. while it is related with financial transactions, it lacks a connection with the concept of a weakening currency.- 'Matching' is an approach to manage cash flows, but it doesn't relate with the phenomena described in the statement.## Step 3: Based on above analysis, it could be noticed that leading is the term most directly related to the context of the statement where payer makes an earlier payment when their currency is strong in relative to payee's one. ## Step 4: Confirm the answer