ACCA FM · Chapter 2 · Question 9 of 10
Which of the following best describes commercial paper?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Unsecured short-term debt issued by large creditworthy companies, usually at a discount to face value
Explanation
Commercial paper is a short-term, unsecured promissory note issued by large companies with high credit ratings, usually with a maturity of under a year and sold at a discount to its face value. Government short-term debt is a treasury bill, and a bank deposit that can be traded would be a certificate of deposit.
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