A Minimum Cash Balance Required by a Bank Is Called

question 10

Multiple Choice

A minimum cash balance required by a bank is called

• A) cash in bank
• B) a cash equivalent
• C) a compensating balance
• D) an EFT

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Definitions:

Reduction of the Principal

The process of decreasing the initial amount of money borrowed or invested over time.

10th Payment

The tenth installment of a series of payments in a loan or mortgage.

Compounded Semi-Annually

Interest on an amount that is calculated twice a year and added to the principal for future interest calculations.

Amortized

The process of paying off debt through regular payments over a set period, where the payments cover both principal and interest.