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Thursday, August 18, 2011

Finance Glossary

Fronting Loans: A loan between a parent company and a foreign subsidiary that is channeled through a financial intermediary.


Common Market: A group of countries committed to the pursuit of a common external trade policy.


Deferral Principle: Parent companies are not taxed on the income of a foreign subsidiary until they actually receive a dividend from that subsidiary.


Turnkey Project: A project in which a firm agrees to set up an operating plant for a foreign client and hand over the “key” when the plant is fully operational.