Describe the essential characteristics of money, Corporate Finance

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Question:

(a) Describe the essential characteristics of money.

(b) Keynes identified three motives for holding balances of money.

(i) What are these three motives?

(ii) Give a brief description of each.

(c) Rank the following financial assets in order of decreasing liquidity.

  • Mortgages on property
  • Government treasury bills
  • Bank deposits
  • Notes and coins 
  • Shares

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