Asked by Mandy Bissey on Jul 15, 2024
Verified
The manager of a seasonal products firm keeps excess cash on hand, particularly after the holiday season, to take advantage of retailers looking to sell excess inventory at below cost. The manager is holding cash for _________________.
A) Speculative reasons.
B) Transactions reasons.
C) Precautionary reasons.
D) Compensating balance reasons.
E) Non-financial reasons.
Speculative Reasons
Motives for making financial decisions based on the anticipation of future market movements, aiming for profit from fluctuations in asset prices.
- Understand the diverse motivations behind cash retention and the related benefits.
Verified Answer
DS
deepakshi saggarJul 17, 2024
Final Answer :
A
Explanation :
The manager is holding cash for speculative reasons, as they aim to take advantage of potential opportunities to purchase excess inventory at below cost from retailers. This involves speculation on future benefits from such transactions.
Learning Objectives
- Understand the diverse motivations behind cash retention and the related benefits.