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The Term Compensating Balance Refers to the Portion of an Unsecured

Question 54

Multiple Choice

The term compensating balance refers to the portion of an unsecured loan that ________.


A) is kept on deposit at a lending institution
B) has already been paid by the borrower
C) has not been paid by the borrower
D) is charged by the lender as interest
E) is not supported by any collateral securities

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