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    Financial Institutions Management
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    Exam 10: Credit Risk: Individual Loan Risk
  5. Question
    Because a Compensating Balance Is the Proportion of a Loan
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Because a Compensating Balance Is the Proportion of a Loan

Question 50

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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