Asked by Rachel Oftedahl on Jul 11, 2024
Verified
Which of the following is the best definition of speculative motive?
A) The need to hold cash to take advantage of additional investment opportunities, such as bargain purchases.
B) Much like an automated teller machine card; one use is within corporations to control access to information by employees
C) Bank makes proceeds of cheques deposited available the same day before cheques clear.
D) The need to hold cash as a safety margin to act as a financial reserve.
E) Special post office boxes set up to intercept and speed up accounts receivable payments.
Speculative Motive
The intention to hold cash or other assets in anticipation of profit from fluctuations in their prices or exchange rates.
Investment Opportunities
Options available to individuals and firms to invest capital with the intent to generate returns.
Bargain Purchases
Acquisitions made at a price significantly below the fair market value of the asset, resulting in an immediate gain for the purchaser.
- Understand the precautionary, speculative, and transactions motives behind cash management.
Verified Answer
OO
Olivia OstermanJul 14, 2024
Final Answer :
A
Explanation :
The speculative motive refers to holding cash to take advantage of potential investment opportunities that may arise, such as purchasing assets at a lower price. This is best described in option A.
Learning Objectives
- Understand the precautionary, speculative, and transactions motives behind cash management.