Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank . Concept Introduction: Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Question

Want to see the full answer?

Answer 1

Question

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 2

Question

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Answer 6

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Answer 7

Chapter 9, Problem 13Q

To determine

Why a bank quite often demands that the organizations it lends has to continue compensating balances at the bank.

Concept Introduction:

Compensating balances can identify as a guarantee which refer to the minimum amount that must be maintained in a bank when obtaining a loan. This additionally helps to build up long term relationships with clients, which make it less demanding for the bank to gather data about forthcoming borrowers, along these lines diminishing the unfavorable choice issues. Compensating balances enable the bank to watch the activities of a borrowing organisation with the goal that it can keep the firm away from taking a lot of risks.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 9 - Prob. 1LO Ch. 9 - Prob. 2LO Ch. 9 - Prob. 3LO Ch. 9 - Prob. 4LO Ch. 9 - Prob. 5LO Ch. 9 - Prob. 6LO Ch. 9 - Prob. 1Q Ch. 9 - Prob. 2Q Ch. 9 - Prob. 3Q Ch. 9 - Prob. 4Q

Want to see the full answer?

Chapter 9 Solutions