Which of the following is not a valid reason for holding
cash?
a. to meet transaction requirements
b. to earn the highest return possible
c. to satisfy emergency needs for funds
d. to have a cushion against unexpected expense
Answer
b. to earn the highest return possible
When the cash is hold then it is not increased, with the time
the value of money increases but the cash hold remains the same.
That is why the cash is either invested or given loan or
utilized.