In a parallel loan arrangement, an example would be where
A) the United States parent firm lends dollars to the U.S. affiliate, while the Dutch parent firm lends guilders to the Dutch affiliate.
B) the United States parent firm lends dollars to the Dutch affiliate, while the Dutch parent lends guilders to the American affiliate.
C) the United States parent lends guilders to the Dutch affiliate, while the Dutch parent lends dollars to the American affiliate.
D) the parent firms lend funds to each other, while the affiliates lend funds to each other.

Question

Quizplus · Accepted Answer

In a parallel loan arrangement, the parent firms in different countries each lend funds to their respective affiliates in the same currency. Therefore, option B is the correct example of a parallel loan arrangement where the United States parent firm lends dollars to the Dutch affiliate, while the Dutch parent firm lends guilders to the American affiliate. The other options do not follow the parallel loan arrangement concept.

In a Parallel Loan Arrangement, an Example Would Be Where