COMPENSATING BALANCES Definition

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COMPENSATING BALANCES are the funds a business might be required to keep in a deposit or reserve account to help offset what the bank perceives as risk. The lender might require that an amount based on the business' average account balance or a certain percentage of the face value of the loan be maintained in a deposit account.

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ENROLLED AGENT (EA) is any individual who is enrolled under the provisions of Treasury Department Circular No. 230 to practice before the IRS.

EXCHANGE RATE EFFECTS is the effect on any given currency as the rate of exchange changes providing either a gain or loss in value against other currencies.

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