1. Compensating balances are designed to
A) increase the interest income the bank earns on the loan.
B) decrease the cost of the loan to the customer.
C) increase the fee based income the bank earns on the loan.
D) decrease the fee based income the customer must pay on the loan.
2. Taking a firm private by purchasing the equity and using a substantial amount of borrowed funds to finance the purchase is termed a .
A) venture capital investment
B) reverse merger
C) LBO
D) arbitrage investment