An Advantage of Trading with an Affiliated Party for an MNE

question 58

True/False

An advantage of trading with an affiliated party for an MNE, compared to an unaffiliated party, could be reduced contracting costs and less to even no need to protect against nonpayment.

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Definitions:

Institutional Investor

An organization, such as a bank, pension fund, mutual fund, or insurance company, that invests large sums of money into the financial markets.

Zero-Coupon Bonds

Bonds issued at a discount to their face value, paying no periodic interest but redeemed at par value at maturity.

Par Value

The face value of a bond or stock, as stated by the issuing company.

Life Insurers

Companies that provide policies to individuals that pay beneficiaries upon the policyholder’s death, or provide coverage for other life-related risks.