FIN 375 Week 3 Participation Discussion Question 1

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FIN 375 Week 3 Participation Discussion Question 1

Each week three graded discussion questions are available for student responses. Each DQ is worth 20 points. You can do original posts or reply to other student posts.

Please do some research on bank lines of credit.  What is a compensating balance, as it relates to a working capital line of credit? 

Why might the bank require a compensating balance with a line of credit?