How could LEXCO achieve low-cost financing while eliminating its exposure to exchange rate risk?

Currency swaps are one way LEXCO is able to achieve low cost financing and eliminate its exchange rate exposure. It involves entering into a contract with another party whereby the one side will pay interest on an unsecured loan that is denominated as a foreign currency. Both parties will then regularly exchange payment based on the exchange rate that is in effect at the moment of each transaction.

LEXCO can also issue bonds and other debt instruments that are in different currencies. By doing so, it will be able to reduce costs associated with borrowing as well as diversify the base of its lending. Derivatives, such as options or forwards, can also help protect against sudden changes in the exchange rate. By agreeing to purchase or sell certain amounts of foreign currency at fixed prices they are able to be used without any financial risk.

By implementing these strategies, LEXCO should be able to secure more affordable financing arrangements while simultaneously mitigating their risk from changes in foreign exchange markets – thereby enabling them to leverage their resources more efficiently and maximize returns over time.