- 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
The precautionary demand for money refers to the demand to hold money ______
B. for day-to-day transactions in the near future.
C. to buy financial assets that can potentially yield a high return.
A. to provide a buffer against unforeseen events that might require money.
B. for day-to-day transactions in the near future.
C. to buy financial assets that can potentially yield a high return.
Correct Answer: A
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