Question: What is a compensating balance? Multiple choice question. A portion of a firm's assets that are pledged as security for a loan in exchange for

What is a compensating balance? Multiple choice question. A portion of a firm's assets that are pledged as security for a loan in exchange for a lower interest rate on the loan A percentage of a loan that must be kept on deposit with the lender A portion of a new loan that is used to repay the balance of a previous loan An increase in the amount borrowed so that the loan interest can be prepaid to the lender

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