The need to hold cash as a safety margin to act as a financial reserve is called the:

A) Speculative motive.
B) Precautionary motive.
C) Transaction motive.
D) Float motive.
E) Compensating balances motive.

Speculative Motive

The intent to hold cash or other assets for the purpose of benefiting from future market movements.

Precautionary Motive

The desire to hold cash or liquid assets to guard against unforeseen future needs and emergencies.

Transaction Motive

The need for cash to meet immediate and anticipated demands for payment, a key reason for holding cash in business.