A Compensating Balance Not Only Forces the Borrower to Be

question 35

True/False

A compensating balance not only forces the borrower to be a good customer of the bank but may also raise the interest cost to the borrower.

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Definitions:

Macula Lutea

A region in the retina responsible for high acuity vision, characterized by a high concentration of cones and called the "yellow spot".

Photoreceptor Cells

Specialized cells found in the retina of the eye that detect light and convert it into electrical signals for vision.

Ciliary Ring

Portion of the ciliary body of the eye that contains smooth muscle cells.

Iris

The colored part of the eye surrounding the pupil, controlling the amount of light entering the eye by adjusting the size of the pupil.