Holding extra money in your checking account just in case your car needs to be repaired is an example of which of the following motives for holding money?

Question

Quizplus · Accepted Answer

The precautionary motive for holding money refers to holding extra money for unexpected future needs or emergencies, such as car repairs. The transactions motive refers to holding money to conduct daily transactions, while the speculative motive refers to holding money in anticipation of future financial opportunities. None of the above is not correct because one of the motives applies.

Holding Extra Money in Your Checking Account Just in Case