Which One of the Following Statements Is Correct Concerning a Motive

question 31

Multiple Choice

Which one of the following statements is correct concerning a motive for maintaining liquidity?

• A) Firms should maintain compensating balances just in case they encounter an emergency situation.
• B) Firms need to hold cash as a buffer between inflowing and outflowing transactions.
• C) International firms have a transactional motive to hold cash in case favorable exchange rates become available.
• D) Firms need to hold cash for precautionary motives especially since money market accounts are not very liquid.
• E) The increasing use of electronic funds transfers is increasing the transactional motive to hold cash.

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Definitions:

Information

Data that has been organized and processed to be meaningful to the person who receives it, often helping in making decisions or solving problems.

Bayley Scales

A series of standardized tests used primarily to assess the motor, language, and cognitive development of infants and toddlers.

Infant Intelligence

The cognitive abilities of infants, including their capacity for memory, problem-solving, language acquisition, and understanding of their environment.

Standardized Measure

A tool or instrument used to assess variables that have been uniformly applied across different groups to ensure comparability.