1. Since their introduction, the proportion of adjustable rate mortgages (ARMs) to fixedrate residential mortgages has remained very stable over interest rate cycles. II. Because a compensating balance is the proportion of a loan that must be kept on deposit at the lending institution, the actual return to the lender on the usable portion of these loans is higher. III. Because compensating balances and fees are used to increase return on a loan, the credit risk premium is not the fundamental factor driving the promised return once the base rate on the loan has been set. Which of the above statements is True? a. Statement I b. Statement II c. Statement III d. Statement I and III e. Statement I and