Terminator, Inc. keeps excess cash on hand in case of an industrial accident in the manufacturing of its wheat herbicide. This is an example of a ____________ for holding cash.

A) speculative need
B) transactions need
C) deterministic need
D) compensating need
E) precautionary need

Precautionary Need

The motive to hold cash or assets to safeguard against unexpected emergencies or transactions.

Speculative Need

A financial concept where individuals or businesses hold cash or assets in speculation of market changes, expecting to profit from fluctuations in prices or exchange rates.

Transactions Need

encapsulates the necessity for exchanges or trades to occur within an economy or market for goods, services, financial assets, or currencies.