2.Which of the following is NOT an aspect of commercial paper? (A)They are sold with no...

2.Which of the following is NOT an aspect of commercial paper?

(A)They are sold with no more than 270 days to maturity.

(B)Liquidity “dries up” beyond about 90 days to maturity.

(C)They are backed by a revolving line of credit.

(D)They can be issued by companies that have credit ratings of at least B (“Single B”)

Solutions

Expert Solution

Commercial paper is a unsecured form of promissory note which is not backed by any kind of collateral, so if it is said that they are backed by a revolving line of credit then it is a complete false statement.

All the other statements are true

Correct answer will be option ( C) they are backed by revolving line of credit.

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Which one of the following statements about commercial paper is NOT true?Commercial paper issued in the...

Which one of the following statements about commercial paper is NOT true?Commercial paper issued in the United States a. carries an interest rate above the prime rate. b. is virtually always rated by at least one ratings agency. c. has a maximum maturity of 270 days. d. has no secondary market. e. is an unsecured short-term promissory note.

Which of the following is an example of equity? a. Commercial paper b. Common stock c....

Which of the following is an example of equity? a. Commercial paper b. Common stock c. Deferred tax d. A contingent liability

A company purchased 2 million piece of commercial paper to bemature on august1.The paper is...

A company purchased 2 million piece of commercial paper to be mature on august1.The paper is purchased by an investor on june 3. Find the purchase price if based on discount rate of 11% by using p=S (1-dt) and showing full calculations.

A company purchased 2 million piece of commercial paper to be mature on august1.The paper is...

A company purchased 2 million piece of commercial paper to be mature on august1.The paper is purchased by an investor on june 3. Find the purchase price if based on discount rate of 11%

How does “direct” commercial paper differ from “dealer” commercial paper? Which one would likely be more...

How does “direct” commercial paper differ from “dealer” commercial paper? Which one would likely be more expensive for a company to issue? Explain your answer.

Define and Discuss the followings 1) Commercial Paper (What are the characteristics of commercial paper, what...

Define and Discuss the followings 1) Commercial Paper (What are the characteristics of commercial paper, what period of time is commercia paper issued for, etc.) 2) Municipal Bonds and taxation 3) Term Structure of Interest Rated aka the Yield Curve

A finance company issues commercial paper to an insurance company, which pays for them with the...

A finance company issues commercial paper to an insurance company, which pays for them with the funds raised by issuing bonds to Mrs Jones. The finance company then buys shares issued by Telstra for the funding of its new tower. Who provides funds to Telstra? A. Mrs Jones B. The finance company C. Telstra D. The insurance company

Based on your experience, which aspect(s) of the research paper and/or oral defense do you anticipate...

Based on your experience, which aspect(s) of the research paper and/or oral defense do you anticipate will be your greatest challenge? Why? How do you plan to address challenges so that you can be successful? What resources will you seek out now, in Week 1, to prepare you for a successfully completed project?

Which of the following is an aspect of functional strategy? It is customized to a specific...

Which of the following is an aspect of functional strategy? It is customized to a specific functional area of the company Deliberately chooseing a different set of multy-functional activities to deliver value uniquely Combines overal corporate end goals for which the firm is striving and means to get there Determines the business in which a company will compete

Which money market is not created by a bank? Commercial paper Certificate of deposit Bankers acceptance...

Which money market is not created by a bank? Commercial paper Certificate of deposit Bankers acceptance Federal funds

Subjects