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Compensating balances O are a particular form of collateral commonly required on commercial loans. are a required minimum amount of funds that a borrower (i.e.,

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Compensating balances O are a particular form of collateral commonly required on commercial loans. are a required minimum amount of funds that a borrower (i.e., a firm receiving a loan) must keep in a checking account at the bank. O allow banks to monitor firms' check payment practices which can yield information about their borrowers' financial conditions. O all of the above. O None of the above

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