Speculative Demand for Money Arises from the Desire by Individuals

question 72

Multiple Choice

Speculative demand for money arises from the desire by individuals and firms to hold cash balances

• A)for speculative equity purchases.
• B)in anticipation of changes in interest rates and bond prices.
• C)to meet unforeseen business expenses.
• D)in anticipation of investing in capital purchases for the firm.
• E)to maintain adequate cash flow in case of inflation.

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Definitions:

Realized Gain

The profit made from the sale of an asset, which becomes evident upon completion of the transaction.

Fair Value

The estimated market price of an asset or liability, assuming knowledgeable, willing parties in an arm's length transaction.

Readily Marketable

Assets that can be quickly converted into cash with minimal impact on their price.

Management's Intent

The intentions or planned actions of a company's management, often related to investments, operations, or financial decisions.