Which of the Following Is NOT a Typical Characteristic of a Fronting

question 50

Multiple Choice

Which of the following is NOT a typical characteristic of a fronting loan made to an international subsidiary?

• A) The parent makes a deposit equal to the size of the desired loan into a large commercial bank.
• B) The bank lends to the subsidiary firm an amount equal to the parent deposit at a slightly higher interest rate.
• C) The lending bank is located in the subsidiary's country.
• D) All of the above are typical characteristics of a fronting loan.

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Definitions:

Convergent

Relating to or involving the coming together of lines, ideas, or pieces of information so they eventually merge.

Divergent Thinking

A mental approach or technique for producing innovative ideas through the examination of numerous potential answers.

Convergent

Thinking that involves bringing several pieces of information together to solve a problem or come to a single, correct answer.

Heuristic

A problem-solving approach that employs a practical method or various shortcuts to produce solutions that may not be perfect but are sufficient for the immediate goals.