If Sunbelt Computers Were to Take Out a Short-Term Loan

Multiple Choice

If Sunbelt Computers were to take out a short-term loan from Chase for $5 million and were required to keep $500,000 of that in its Chase account, this would be called a(n)

A) compensating balance.
B) security deposit.
C) commercial-paper arrangement.
D) reserve requirement.
E) insurance policy.