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A Canadian Firm with a U

Question 42
Multiple Choice

A Canadian firm with a U.S. subsidiary and a U.S. firm with a Canadian subsidiary agree to a parallel loan agreement. In such an agreement, the Canadian firm is making a/an ________ loan to the ________ subsidiary while effectively financing the ________ subsidiary. A) indirect; U.S.; Canadian B) indirect; Canadian; U.S. C) direct; U.S.; Canadian D) direct; Canadian; U.S.

Related questions
Q 43
Which of the following is NOT an important impediment to widespread use of parallel loans? A) difficulty in finding an appropriate counterparty B) the risk that one of the parties will fail to return the borrowed funds when agreed C) the process does not avoid exchange rate risk D) All of the above are significant impediments.
Q 44
A ________ resembles a back-to-back loan except that it does not appear on a firm's balance sheet. A) forward loan B) currency hedge C) counterparty D) currency swap
Q 45
A ________ is the term used to describe a foreign currency agreement between two parties to exchange a given amount of one currency for another, and after a period of time, to give back the original amounts. A) matched flow B) currency swap C) back-to-back loan D) none of the above
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