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

Question

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A)Compensating balance refers to the portion of an unsecured loan that is kept on deposit at a lending institution to protect the lender and increase the lender's return.
B)Compensating balance refers to the portion of an unsecured loan that is kept on deposit at a lending institution to protect the lender and increase the lender's return.
C)Compensating balance refers to the portion of an unsecured loan that is kept on deposit at a lending institution to protect the lender and increase the lender's return.
D)Compensating balance refers to the portion of an unsecured loan that is kept on deposit at a lending institution to protect the lender and increase the lender's return.
E)Compensating balance refers to the portion of an unsecured loan that is kept on deposit at a lending institution to protect the lender and increase the lender's return.

The Term Compensating Balance Refers to the Portion of an Unsecured