A firm keeps excess cash on hand to buy the distressed assets of its competitors

Question

A firm keeps excess cash on hand to buy the distressed assets of its competitors in times of economic recession. This is an example of the ___________ need for holding cash. A) speculative B) precautionary C) transactions D) deterministic E) compensating balances A firm keeps excess cash on hand to buy the distressed assets of its competitors in times of economic recession. This is an example of the ___________ need for holding cash. A) speculative B) precautionary C) transactions D) deterministic E) compensating balances A firm keeps excess cash on hand to buy the distressed assets of its competitors in times of economic recession. This is an example of the ___________ need for holding cash. A) speculative B) precautionary C) transactions D) deterministic E) compensating balances

Explanation / Answer

Ans:

Option A

speculative

It is the cash that is held to take advantage of additional investment opportunities.if cash is held to buy the distressed assets of its competitors in times of economic recession, it is an example of speculative motive.

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