- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 12. Monetary and Fiscal Policy
- Subject 2. The Demand for and Supply of Money
CFA Practice Question
Which type of demand for money will tend to fall as the returns on the other financial assets rise?
B. Precautionary
C. Speculative
A. Transactions-related
B. Precautionary
C. Speculative
Correct Answer: C
Speculative balances will tend to be inversely related to the expected return on other financial assets.
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