Multiple choice

Which of the following is the feature of the commercial paper?

  1. It is an unsecured money market instrument issued in the form of promissory note.

  2. The highly rated corporate borrowers can raise short term funds through this instrument.

  3. It is an additional instrument to the investing community.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Commercial paper is an unsecured money market instrument issued in the form of a promissory note, typically by highly rated corporate borrowers to raise short-term funds. It serves as an additional investment instrument for the investing community, offering a higher return than traditional short-term instruments while carrying minimal credit risk due to the high creditworthiness of issuers.

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