A Reason That Banks Would Maintain a Bank Balance Exceeding

question 71

Multiple Choice

A reason that banks would maintain a bank balance exceeding the compensating balance requirements is:

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

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Definitions:

Service Center

A segment within an organization that provides essential support services or assistance to other departments or units within the organization.