Ask Question
29 November, 01:40

1 Compensating balances:a) are used by banks as a substitute for charging service fees. b) are created by having a sweep account. c) generate returns to customers from interest-bearing accounts. d) are used to reward new accounts. 2 Monthly installment loans usually increase the effective interest rate of borrowing by approximately 2 times the stated interest rate. True/Flase

+4
Answers (1)
  1. 29 November, 02:02
    0
    A.

    Compensating balances are used by banks as a substitute for charging service fees

    Explanation:

    Compensating balance is the amount of money that a customer who uses the bank's services, has to keep in an account. The purpose of this money will be to offset the cost incurred by the bank in the course of making its services available to the customer.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “1 Compensating balances:a) are used by banks as a substitute for charging service fees. b) are created by having a sweep account. c) ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers