Which of the following would be an example of the "speculative motive" for a firm holding cash balances?
A) make dividend payments
B) anticipating a strike
C) purchase of inventory
D) take advantage of an anticipated decline in the price of raw materials

Question

Quizplus · Accepted Answer

The speculative motive for holding cash is to take advantage of opportunities that may arise in the future, such as an anticipated decline in the price of raw materials. Options A, B, and C are examples of precautionary, transaction, and precautionary motives, respectively.

Which of the Following Would Be an Example of the "Speculative