Asked by Monica De Leon on May 06, 2024
Verified
Identify a true statement about commercial paper.
A) Access to the commercial paper market is restricted to small and medium enterprises.
B) Commercial paper has a maturity that ranges from 10 to 27 years.
C) Most commercial paper is secured.
D) Commercial paper is typically sold in multiples of $100,000 to $1 million.
Commercial Paper
An unsecured, short-term debt instrument issued by corporations to finance their immediate operational needs.
Maturity
The stage in a product’s lifecycle or a company’s growth where growth slows down, and it reaches a steady state of maximum output or sales.
Secured
Protected against threat or harm, or in financial terms, backed by collateral.
- Identify various short-term and long-term funding options and their suitability for different scenarios.
Verified Answer
KR
Kayla RamdatMay 12, 2024
Final Answer :
D
Explanation :
Commercial paper is a short-term, unsecured promissory note issued by corporations with high credit ratings, typically sold in large denominations ranging from $100,000 to $1 million. This makes it accessible primarily to institutional investors rather than small investors.
Learning Objectives
- Identify various short-term and long-term funding options and their suitability for different scenarios.
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