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

A compensating balance

Compensates a financial institution for services rendered by providing it with deposits of funds.
Is used to compensate for possible losses on a marketable securities portfolio.
Is a level of inventory held to compensate for variations in usage rate and lead time.
Is the amount of prepaid interest on a loan.

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