When an insurance company makes a direct loan to a firm, the loan is known as

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A private placement is a non-public offering of securities or debt instruments such as bonds, notes, or preferred shares, that are sold directly to institutional or accredited investors. When an insurance company makes a direct loan to a firm, it is essentially a type of private placement, as the company is providing the funds directly to the borrower without going through a public offering. Commercial paper refers to unsecured, short-term debt that is issued by companies in the open market, while accounts receivable and accounts payable refer to money owed by customers or owed to suppliers, respectively.

When an Insurance Company Makes a Direct Loan to a Firm