Which of the following would be an example of the\"transactions motive\" for a f

Question

Which of the following would be an example of the"transactions motive" for a firm holding cash balances?
a. Investing "excess cash balances." b. Anticipating a downturn in the economy. c. Purchase of inventory. d. Take advantage of an anticipated decline in the price ofraw materials. Which of the following would be an example of the"transactions motive" for a firm holding cash balances?
a. Investing "excess cash balances." b. Anticipating a downturn in the economy. c. Purchase of inventory. d. Take advantage of an anticipated decline in the price ofraw materials.

Explanation / Answer

Transaction motive is a desire to hold cash in order toconduct cash-based transactions.

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