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Commercial paper is? Multiple Choice A) a time draft payable to a seller of goods, with...

Commercial paper is?


Multiple Choice
A) a time draft payable to a seller of goods, with payment guaranteed by a bank.
B) short-term funds transferred between financial institutions usually for no more than one day.
C) a short-term unsecured promissory note issued by a company to raise funds for a short time period.
D) a loan to an individual or business to purchase a home, land, or other real property.
E) a marketable bank-issued time deposit that specifies the interest rate earned and a fixed maturity date.

Solutions

Expert Solution

Commercial paper is an unsecured money market instrument issued in the form of promissory notes for short-term finance.

It is generally issued by investment-grade banks and corporations

It is generally issued at a discount to face value and redemption at the face value

It is generally issued for the period up to 9 months

It will be regulated by the Federal Reserve bank

The answer is an option (C) a short term unsecured promissory note issued by a company to raise funds for a short time period

jeff jeffy answered 2 years ago
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