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The Requirement in a Bank Loan Agreement That Obligates a Borrower

Question 63

Multiple Choice

The requirement in a bank loan agreement that obligates a borrower to keep a deposit at the lending bank equal to a specified percentage of the amount of the loan is known as the:


A) Times-prime method
B) Equity kicker
C) Right-of-offset balance
D) Collateral deposit
E) Compensating balance

Correct Answer:

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