Some Bank Loans Require the Firm to Maintain Some Amount

question 138

Multiple Choice

Some bank loans require the firm to maintain some amount of money on a balance at the bank which is known as:

• A)Compensating balance
• B)Transactions motive
• C)Precautionary motive
• D)Simple interest balance

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Definitions:

Ball Bearings

Mechanical assemblies that consist of rolling spherical elements sandwiched between two rings, used to reduce friction and support radial and axial loads.

Radial

Pertaining to or arranged like rays, often used in reference to circular patterns or movements from the center outward.

Angular Contact

Referring to a type of bearing designed to support combined radial and axial loads with contact angles.

Ratchet Wheels

Wheels equipped with teeth that lock into place with each motion in one direction, allowing controlled movement.