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FN Reasons for holding cash

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what are the two principal reasons for holding cash? Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two reasons?

Apr 19th, 2015

The two principal reasons for holding cash are for "transac­tions" and for "compensating balances". No, the target cash balance is not equal to the sum of the holdings for each reason because the same money can often partially satisfy both motives.


Apr 19th, 2015

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Apr 19th, 2015
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Apr 19th, 2015
Sep 25th, 2017
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