A compensating balance refers to:

Select one:
A. The minimum balance established for a petty cash fund
B. A minimum balance that a financial institution requires a firm to maintain in its account as part of a borrowing arrangement
C. The final cash balance achieved in a bank reconciliation
D. The amount of cash invested temporarily in highly marketable securities

B. A minimum balance that a financial institution requires a firm to maintain in its account as part of a borrowing arrangement

Business

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