A Compensating Balance: I

question 39

Multiple Choice

A compensating balance: I. is required when a firm acquires bank financing other than a line of credit.
II) increases the cost of short-term bank financing.
III) represents an opportunity cost to the lending institution.
IV) is often used as a means of paying for banking services received.

• A) I and III only
• B) II and IV only
• C) II and III only
• D) I and IV only
• E) I, II and IV only

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Definitions:

Predicted Dates

Estimated dates or time periods for future events based on current knowledge or analysis.

Historical Earthquakes

Historical earthquakes are seismic events that have occurred in the past, whose impacts and characteristics have been recorded and studied through history and geology.

Seismic Gaps

Regions along active faults where no recent earthquakes have occurred, but where strong earthquakes are thought to be likely to occur in the future.

San Andreas Fault

A major geological fault in California known for producing significant earthquakes.