A terminal having local processing capability is

KIPS
AI
Intelligent terminal
Optical terminal
None of the above
Intelligent terminal  A terminal (monitor and keyboard) that contains processing power. Intelligent terminals include memory and a processor to perform special display operations. In contrast, a dumb terminal has no processing capabilities; it must rely entirely on the central computer. A smart terminal has some processing capabilities, but not as much as an intelligent terminal.
Source : webopedia.com

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