Which of the following is not a valid reason for holding cash?
A) to meet transaction requirements
B) to earn the highest return possible
C) to satisfy emergency needs for funds
D) to provide a compensating balance for a bank

Question

Quizplus · Accepted Answer

Holding cash is not meant to earn the highest return possible, as cash earns very low or zero returns. The other choices (A, C, and D) are all valid reasons for holding cash.

Which of the Following Is Not a Valid Reason for Holding