Questions
Commercial papers provide _______ funds as compared to other sources.
- less
- more
- medium
- equal
A commercial paper is sold on an __________ basis and does not contain any restrictive conditions.
- Secured
- Unsecured
- Both a and b
- None of the above
Which one of the following is not a merit of commercial paper?
- A commercial paper is sold on an unsecured basis.
- As its is a freely transferable instrument, it has high liquidity.
- Only financially sound and highly rated firms can raise money through commercial papers.
- Companies can park their excess funds in commercial paper
The maturity period of a commercial paper usually ranges from ________.
- 20 to 40 days
- 60 to 90 days
- 120 to 365 days
- 90 to 364 days
Commercial paper may vary from _____ days to ______ days.
- 90, 150
- 90, 300
- 90, 364
- 90, 363
The amount raised by commercial paper is generally very _______.
- large
- small
- equal
- both (a) and (b)
As commercial paper is a freely transferable instrument, it has ________ liquidity.
- High
- Low
- Medium
- Equal
Commercial paper is an unsecured _________ note issued by the firm to raise funds for a short-term period.
- Promissory
- Debit
- Credit
- Sales
The regulation of commercial paper comes under the preview of the ____________.
- Central Bank
- Reserve Bank of India
- State Government
- Central Government
Commercial Paper emerged as a source of __________ finance in our country in the early _________.
- short-term, sixties
- short-term, seventies
- long-term, eighties
- short-term, nineties
The size of money that can be raised through commercial paper is ________ to the excess liquidity available with the suppliers of funds at a particular time.
- limited
- unlimited
- equal
- higher
A commercial paper provides a __________ source of funds.
- Smaller
- Continuous
- Larger
- None of the above
Which of the following is a limitation of commercial paper?
- The size of money that can be raised through commercial paper is limited to the excess liquidity available with suppliers of funds at a particular time.
- A commercial paper is sold on an unsecured basis,
- As it is freely transferable instrument, it has high liquidity.
- It provides more funds compared to other sources.
The cost of commercial paper to the issuing firm is ________ than the cost of commercial bank loans.
- lower
- higher
- equal
- none of the above
Commercial paper is an __________ method of financing.
- personal
- impersonal
- nominal
- real
Commercial papers represent a new financial instrument issued for the purpose of _______________.
- Project financing
- Working capital
- Leasing of plant and equipment
- Import of capital goods