Compensating Balances Reduce the Amount of Cash Available to the Borrower

question 25

True/False

Compensating balances reduce the amount of cash available to the borrower to meet obligations and they decrease the effective interest rate for the borrower.

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Definitions:

Church Bombing

An act of terrorism targeting religious buildings, particularly noted during the civil rights movement in the United States, such as the 1963 bombing of the 16th Street Baptist Church in Birmingham, Alabama.

George Wallace

An American politician known for his pro-segregationist views and as the Governor of Alabama during the Civil Rights Movement.

Martin Luther King Jr.

An influential leader in the American civil rights movement, known for his use of nonviolent civil disobedience to combat racial inequality.

Black Schoolchildren

African American youth attending school, historically subjected to segregation and inequality in education, particularly in the United States.