A Compensating Balance

question 62

Multiple Choice

A compensating balance:

• A) is required when a company acquires any bank financing other than a line of credit.
• B) is often used by banks as a means of rewarding their best credit customers.
• C) decreases the cost of short-term bank financing.
• D) only applies to zero-interest rate loans.
• E) may be required even if a company never borrows funds.

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Definitions:

Defendant's Negligent

Refers to a situation where a defendant in a legal case failed to exercise a reasonable standard of care, leading to harm or damage.

Reasonable Blind Person

A hypothetical standard used in legal contexts to assess accessibility or accommodations required for blind individuals to ensure equal opportunities.

Standard of Care

The level of competence, diligence, and prudence that a reasonable person would exercise in similar circumstances, often used in legal and medical contexts.

Intentionally

Done with purpose or deliberate intention; actions taken with a clear aim or objective in mind.