- 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
As interest rates rise, which type of demand for money falls?
B. Precautionary
C. Speculative
A. Transactions-related
B. Precautionary
C. Speculative
Correct Answer: C
The interest rate is the price of money. It is the opportunity cost of holding money instead of investing in other financial instruments.
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