The Cash Balance That a Financial Institution Requires Its Customer

question 15

True/False

The cash balance that a financial institution requires its customer to maintain in a non-interest-bearing account to offset a line of credit is a compensating balance.

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Definitions:

Service Charge

A fee collected to pay for services related to the primary product or service being purchased.

Airport Currency Exchange

Facilities located within airports where travelers can exchange one country’s currency for another's, typically at market rates.

Exchange Rate

The price at which one currency can be exchanged for another currency.

Units

Refers to a measure of quantity or amount in a specified dimension such as length, mass, time, etc., or in the context of economics and finance, the smallest portion of a product or financial instrument.