Tag: short term sources of finance

Quizzes (0) Questions (26)

Questions Related to short term sources of finance

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Commercial papers provide _______ funds as compared to other sources.

  1. less

  2. more

  3. medium

  4. equal
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
The size of money that can be raised through commercial paper is limited to the excess liquidity available with the suppliers of funds at a particular time. Commercial paper provides more funds as compared to other sources. 
Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

A commercial paper is sold on an __________ basis and does not contain any restrictive conditions.

  1. Secured

  2. Unsecured

  3. Both a and b

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Commercial paper emerged as a source of short-term finance in our country in the early nineties.

Commercial paper is sold on an unsecured basis and does not contain any restrictive conditions. It is issued by one firm to another business firm, insurance companies, banks etc.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Which one of the following is not a merit of commercial paper?

  1. A commercial paper is sold on an unsecured basis.

  2. As its is a freely transferable instrument, it has high liquidity.

  3. Only financially sound and highly rated firms can raise money through commercial papers.

  4. Companies can park their excess funds in commercial paper
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

One of the demerits of commercial paper is that only financially sound and highly rated firms can raise money through commercial paper as it is an unsecured promissory note issued by a firm to raise funds for a short period of time.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

The maturity period of a commercial paper usually ranges from ________.

  1. 20 to 40 days

  2. 60 to 90 days

  3. 120 to 365 days

  4. 90 to 364 days
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Commercial paper is  issued by a firm to raise funds for a short period of time, the time can be ranging from 90 days to 364 days after which it has to be redeemed. Commercial paper is an unsecured promissory note.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Commercial paper may vary from _____ days to ______ days.

  1. 90, 150

  2. 90, 300

  3. 90, 364

  4. 90, 363
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Commercial paper emerged as a source of short-term finance in our country in the early nineties. Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

The amount raised by commercial paper is generally very _______.

  1. large

  2. small

  3. equal

  4. both (a) and (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days. It is issued by one firm to another business firm. The amount raised by commercial papers is very large as the debt is totally unsecured.
Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

As commercial paper is a freely transferable instrument, it has ________ liquidity.

  1. High

  2. Low

  3. Medium

  4. Equal
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Commercial paper is an unsecured promissory note given by a firm to raise finances for a short period of time. 

Only financially sound and highly rated firms can raise money through commercial papers. The size of money that can be raised through commercial paper is limited to the excess liquidity available with the suppliers of funds at a particular time.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Commercial paper is an unsecured _________ note issued by the firm to raise funds for a short-term period.

  1. Promissory

  2. Debit

  3. Credit

  4. Sales
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Commercial paper emerged as a source of short-term finance in our country in the early nineties. Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

The regulation of commercial paper comes under the preview of the ____________.

  1. Central Bank

  2. Reserve Bank of India

  3. State Government

  4. Central Government
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days. It is issued by one firm to another business firm, insurance companies, pension funds, and banks. The amount issued by commercial papers is generally very large. The regulation of commercial paper comes under the purview of Reserve Bank of India.

Multiple choice commerce sources of business finance - 2 commercial paper non-institutional sources - short-term short term sources of finance

Commercial Paper emerged as a source of __________ finance in our country in the early _________.

  1. short-term, sixties

  2. short-term, seventies

  3. long-term, eighties

  4. short-term, nineties
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Commercial paper emerged as a source of short-term finance in our country in the early nineties. Commercial paper is an unsecured promissory note issued by a firm to raise funds for a short period, varying from 90 days to 364 days.