Answer (C) is correct . The three motives for holding cash are (1) as a medium of exchange (the transactions motive), (2) to provide a reserve for contingencies (the precautionary motive), and (3) to take advantage of unexpected opportunities (the speculative motive).
Answer (A) is incorrect because The precautionary motive is one of the three motives for holding cash.
Answer (B) is incorrect because The transactions motive is one of the three motives for holding cash.
Answer (D) is incorrect because The precautionary motive (meeting future needs) is one of the three motives for holding cash.
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