The speculative motive for desiring to hold money balances a. varies directly with income b....

The speculative motive for desiring to hold money balances
a. varies directly with income
b. means that more cash will be held if bond prices are expected to rise in the future
c. means that more cash will be held if interest rates are expected to be lower in the future
d. is greater the lower the rate of interest?

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Answers (1)

isaaq
3 months ago
Answer
b. means that more cash will be held if bond prices are expected to rise in the future

Speculative Motive is a tactic used by investors/ traders to hold cash so as to make the best use of any investment opportunity that arises later on. In such a situation, the cash kept aside by the investor equips him to exploit such an attractive investment opportunity.
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