What are the two methods an FX payment can be executed?

The correct answer highlights two fundamental methods used in foreign exchange (FX) payments: conversion by the sender’s bank and payment in the sender's currency.

In the context of FX payments, one primary method involves the sender's bank converting the funds into the recipient’s currency at the time of the transaction. This ensures that the recipient receives the amount in the local currency they are accustomed to, and the sender benefits from the bank's exchange rate services.

The second method relates to the payment being delivered in the sender's currency, which can sometimes be suitable for transactions where the recipient is able to handle or prefer to receive payments in the currency the sender uses. This can be beneficial in reducing potential conversion fees for the recipient if they have the means to handle the foreign currency.

Understanding these methods is crucial for effective financial management and optimization of currency transactions, as it allows parties involved in international trade to choose the most cost-effective and efficient means of executing an FX payment. Other options may pertain to specific transaction types or categories of payments but do not capture the dual methods of FX payment execution as accurately as the selected answer.