Question: A compensating balance a. Compensates a financial institution for services rendered by providing it with deposits of funds. b. Is used to compensate for possible

A compensating balance

a. Compensates a financial institution for services rendered by providing it with deposits of funds.

b. Is used to compensate for possible losses on a marketable securities portfolio.

c. Is a level of inventory held to compensate for variations in usage rate and lead time.

d. Is an amount paid by financial institutions to compensate large depositors.

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