Question $14$

$0\mathrm{.}75$ pts

The borrower who agrees to hold a $$ promises the lender to maintain a minimum balance in an account generally at $0\%$ interest. The bank is free to use that balance in loans made to other borrowers. The $q,$ is usually a percentage of the loan total.

For the borrower, the $$ is a mixed blessing. The loan generally will come at a lower rate of interest. However, the borrower must pay interest on the full amount of the loan, including the balance that may not be spent.

conditional balance

collateral balance

credit risk balance

None of the provided inswers is correct.

compensating balance

captive balance

Next ${?}^{\text{'}}$

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