Which of the following is NOT a motivation for holding cash?
A) to meet its day-to-day needs
B) to compensate for the uncertainty associated with cash flows
C) to satisfy bank requirements
D) to place in short-term investments

Question

Quizplus · Accepted Answer

Holding cash is not a motivation for placing it in short-term investments. Short-term investments are made to earn a return on excess cash that is not immediately needed for day-to-day transactions or to compensate for uncertainty in cash flows. However, holding cash may satisfy bank requirements, help the entity meet its day-to-day needs, and compensate for the uncertainty associated with cash flows.

Which of the Following Is NOT a Motivation for Holding