A Reason a Firm Would Maintain a Bank Balance Exceeding

question 17

Multiple Choice

A reason a firm would maintain a bank balance exceeding the compensating balance requirements is because it ______.

• A) reduces the opportunity cost
• B) improves the firm's credit rating
• C) alters the requirements imposed by the bank
• D) reduces shortage costs

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Definitions:

Scaling

A dental procedure that removes plaque and tartar from the teeth to prevent periodontal disease.

Dandruff

A common scalp condition marked by flaking and sometimes itching.

Alopecia

Partial or complete loss of hair; baldness.

Edentulous

A condition characterized by the lack of teeth in an individual's mouth, which can affect their ability to eat and speak.