Alexa Keeps $500 Readily Accessible in Her Checking Account So

question 24

Multiple Choice

Alexa keeps $500 readily accessible in her checking account so that she can take advantage of changes in the prices of other financial assets. This illustrates the

• A) speculative demand for money.
• B) transfer demand for money.
• C) precautionary demand for money.
• D) transactions demand for money.

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Definitions:

Securitization Entity

A structured entity created to pool various financial assets and then sell them to investors, converting illiquid assets into liquid ones.

Collateralized Borrowing

A loan secured by pledging an asset as collateral, ensuring the lender can seize the asset if the borrower defaults.

Significant Benefits

These refer to notable advantages or positive impacts, often seen in the context of employee compensation, strategic decisions, or investments.

Mortgage Portfolio

A collection of mortgage loans held by a financial institution or investor that can generate income through interest payments made by the borrowers.