A loan arrangement in which a parent company reduces its political risk by using an intermediary bank rather than a direct transfer of funds to a subsidiary is called a(n)

Question

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A fronting loan is when a parent company uses an intermediary bank to reduce political risks. A parallel loan is when two companies in different countries lend to each other in their respective currencies. An Exim bank direct loan is a loan provided by the Export-Import Bank of a country to a foreign borrower. None of these options describe the loan arrangement mentioned in the question.

A Loan Arrangement in Which a Parent Company Reduces Its