Asked by Kayla Taylor on Jul 12, 2024
Verified
The motive behind holding cash for events such as a major storm causing uninsured damage is called the _____ motive.
A) Speculative
B) Transaction
C) Reserve
D) Precautionary
E) Concentration
Precautionary Motive
The desire to hold cash or other liquid assets to meet unexpected needs and financial emergencies.
- Discern the multiple justifications for holding onto cash and the ensuing rewards.
Verified Answer
ZK
Zybrea KnightJul 15, 2024
Final Answer :
D
Explanation :
The precautionary motive for holding cash refers to keeping cash on hand to cover unexpected events or emergencies, such as a major storm causing uninsured damage. This ensures that an individual or business can manage unforeseen expenses without having to liquidate assets under unfavorable conditions.
Learning Objectives
- Discern the multiple justifications for holding onto cash and the ensuing rewards.