Because a Compensating Balance Is the Proportion of a Loan

question 50

True/False

Because a compensating balance is the proportion of a loan that must be kept on deposit at the lending institution, the actual return to the lender on the usable portion of these loans is higher.

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Definitions:

Non-Disclosure Clauses

Provisions in a contract that prohibit the sharing of confidential information with unauthorized parties.

Fiduciary Duty

A duty to act in the best interests of another; such duty may arise between directors and officers and the corporation they serve, between business associates including senior employees and their employer, between agents and their principals, and between partners, also called utmost good faith.

Passing-Off

The tort of misleading the public about the identity of a business or product.

Employment Contract

A formal agreement specifying the terms and conditions of the relationship between an employer and an employee.