Most Firms Like Lines of Credit Because the Compensating Balance

question 182

True/False

Most firms like lines of credit because the compensating balance requirement frees up their capital to pay short-term debts.

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the role of personal traits and underestimate the influence of situational factors when explaining other people's behavior.

Situational Causes

Factors external to an individual that can influence behavior and outcomes in specific contexts.

Internal Explanations

Attributions that relate the causes of behavior to personal aspects such as traits, mood, abilities, or feelings.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.