This question was popular among the candidates, but most of the candidates failed to provide adequate answers for the (c) part of the question. This obviously made them to score below average marks.
These candidates did not include the following in their answers:
(c) Determinants of the motives are:
- Transactions motive
(i) size of income;
(ii) interval between wage payments;
(iii) availability of credit;
(iv) family size.
- Precautionary motive
(i) size of income;
(ii) interval between wage payments;
(iii) availability of credit;
(iv) perception of risks.
- Speculative motive
(i) the rate of interest;
(ii) the degree of risk aversion.
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