Scenario: Verandas International
Verandas International is expanding its operations in North America. The Dutch company supplies customized furniture to five-star hotels. Verandas International is a leader in this industry, but the company believes it must increase its geographic reach to maintain that position.
-The Verandas U.S.subsidiary was turned down when it tried to borrow from a U.S.bank.The bank manager suggested that the parent firm deposit money with the U.S.bank's Dutch branch,and then the U.S.bank's home office would lend the money to the U.S.subsidiary.This type of arrangement is known as a(n)________.
A) mortgage loan
B) title loan
C) back-to-back loan
D) syndicated loan

Question

Quizplus · Accepted Answer

The described scenario is an example of a back-to-back loan, where a parent company deposits money with a bank's foreign branch, and the bank's home office uses the deposit to lend money to the company's subsidiary in a different country.

Scenario: Verandas International Verandas International Is Expanding Its Operations in North America. the North