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.

Question

Quizplus · Accepted Answer

The process of parallel loans actually allows parties to avoid exchange rate risk by making the loan and repayment in the same currency, so option C is not an impediment to the widespread use of parallel loans. Options A and B are both significant impediments as finding an appropriate counterparty can be difficult and there is always the risk that one party may not repay the borrowed funds as agreed.

Which of the Following Is NOT an Important Impediment to Widespread