Which of the following is not a reason that firms typically hold cash?
A)To make routine transactions
B)To satisfy compensating balance requirements
C)To earn interest
D)To be able to respond to emergencies and opportunities

Question

Quizplus · Accepted Answer

Firms typically hold cash to make routine transactions, satisfy compensating balance requirements, and be able to respond to emergencies and opportunities. However, earning interest is not typically a primary reason for holding cash since the interest earned on cash balances is usually quite low.

Which of the Following Is Not a Reason That Firms