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A compensating balance I. is required when a firm acquires bank financing other than a line of credit. II. increases the cost of short-term bank

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A compensating balance I. is required when a firm acquires bank financing other than a line of credit. II. increases the cost of short-term bank financing. III. represents an opportunity cost to the lending institution. IV. is often used as a means of paying for banking services received. Multiple Choice II and III only II and IV only I and III only I and IV only I, II, and IV only

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