General Studies · Cash Management
In corporate treasury management, cash balances are often categorized based on the underlying motive for holding them. When a financial manager maintains a specific portion of liquid assets under the Speculative Motive, these funds are primarily intended for:
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- 1Maintaining a non-interest-bearing deposit account as a mandatory requirement for bank loan facilities.
- 2Taking advantage of unanticipated favorable market movements or bargain purchases of inventory.✓
- 3Serving as a safety buffer against unforeseen contingencies like equipment failure or sudden supply chain disruptions.
- 4Settling immediate and predictable business liabilities like supplier invoices and monthly rent.
Correct answer
Taking advantage of unanticipated favorable market movements or bargain purchases of inventory.
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