AFP
CTP · Question #579
(Topic 6) When a subsidiary borrows money, the parent, sister subsidiary, or other entity is often used in order to:
The correct answer is B. guarantee the obligations of the borrower. See the full explanation below for the reasoning.
Question
- (Topic 6)
When a subsidiary borrows money, the parent, sister subsidiary, or other entity is often used in order to:
Options
- Adiversify the risk of the investment.
- Bguarantee the obligations of the borrower.
- Cincrease the return of a security.
- Dprevent a covenant violation.
How the community answered
(44 responses)- A5% (2)
- B75% (33)
- C14% (6)
- D7% (3)
Community Discussion
No community discussion yet for this question.