What is a Commercial Paper?

5. What is a Commercial Paper?

  1. Short-term U.S. government debt obligation
  2. A fixed-income investment scheme
  3. A financial product commonly sold by banks, thrift institutions, and credit unions
  4. An unsecured money market instrument

Answer: D) An unsecured money market instrument


Commercial paper is an unstable type of promissory note that pays a proper pace of interest. It is regularly given by enormous banks or companies to cover transient receivables and meet momentary monetary commitments, like subsidizing for another venture. Similarly, as with some other sort of bond or obligation instrument, the responsible substance offers the paper expecting that it will be in a situation to pay both interest and head by development. It is only from time to time utilized as a subsidizing vehicle for longer-term commitments because different options are more qualified for that reason.

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