Under a Compensating Balance Agreement

question 23

Multiple Choice

Under a compensating balance agreement:

• A) the minimum compensating balance is considered a cash equivalent.
• B) the compensating balance is available for day-to-day use.
• C) the net result is that the actual interest rate is higher than the stated interest rate.
• D) all of the above are true.

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Definitions:

Input-Throughput-Output Cycle

A model or process that describes how input (resources, information) is processed (throughput) to produce a certain output (products, services).

Relevant Phases

Pertains to the specific stages or segments within a process or project that are significant and pertinent to its successful completion.

Right Things

Actions or decisions that are considered morally correct or most beneficial from an ethical standpoint.

Right Way

The most effective or ethical approach to achieve a goal or solve a problem.