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 a means to earn the highest return possible as it generally offers low or no returns. The other options listed are all valid reasons for holding cash.

Which of the Following Is Not a Valid Reason for Holding