What Is a Compensating Balance

question 81

Multiple Choice

What is a compensating balance?

• A) Savings account balances.
• B) Margin accounts held with brokers.
• C) Temporary investments serving as collateral for outstanding loans.
• D) Minimum deposits required to be maintained in connection with a borrowing arrangement.

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Definitions:

Unclear

Not easy to see, understand, or distinguish; not obvious or definite.

Valid Acceptance

An unqualified expression of assent to the terms of an offer, forming a contract.

Present Intent

A legal term indicating a person's current intention to perform an act or designate a legal status to an item of property.

UCC

Stands for Uniform Commercial Code; a comprehensive set of laws governing all commercial transactions in the United States.