A compensating balance as defined by the SEC is best reflected by which of the following?
A) A savings account maintained at the bank equal to the amount of all outstanding loans.
B) An amount of capital stock held in the company's treasury equal to outstanding loan commitments.
C) The portion of any demand deposit, time deposit, or certificate of deposit maintained by a corporation which constitutes support for existing borrowing arrangements of the corporation with the lending institution.
D) A balance held in a time or demand deposit account that is equal to the interest currently due on a loan.
Correct Answer:
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