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Explain the three categories of motives

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Reference no: EM132203741

A company, when deciding its cash management policy, has to balance the costs of holding insufficient cash with the costs of holding cash. The motives for holding cash can be categorized as follows:

  • Transaction motive
  • Precautionary motive
  • Speculative motive

Explain the three categories of motives for holding cash given above.

Reference no: EM132203741

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