A reason a firm would maintain a bank balance exceeding the compensating balance requirements is because it ______.

Name: A reason a firm would maintain a bank balance exceeding the compensating balance requirements is because it ______.
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Maintaining a bank balance exceeding the compensating balance requirements helps a firm reduce shortage costs by ensuring it has sufficient funds to cover unexpected expenses or shortfalls, avoiding the need for emergency financing or penalties.

A Reason a Firm Would Maintain a Bank Balance Exceeding