EARNING ASSET Definition

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EARNING ASSET is an asset which provides income (e,g, rental property).

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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.

SPECULATOR is an investor who is willing to accept sub­stantial risk for the possibility of a large return.

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