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 involves an intermediary bank facilitating the loan to the subsidiary, which reduces the parent company's political risk. Parallel loans and Eximbank direct loans do not involve an intermediary bank, and OPIC is a specific government agency for providing financing and insurance for US businesses investing in developing countries.

A Loan Arrangement in Which a Parent Company Reduces Its