Practicing Success
Practicing Success
CUET Preparation Today
| Which is true in respect of commercial papers? |
These are short term These are unsecured promissory Notes These are negotiable and transferable by endorsement and delivery with a fixed maturity period All of the above |
| All of the above |
| Commercial Paper: Commercial paper is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. It usually has a maturity period of 15 days to one year. The issuance of commercial paper is an alternative to bank borrowing for large companies that are generally considered to be financially strong. It is sold at a discount and redeemed at par. The original purpose of commercial paper was to provide short-terms funds for seasonal and working capital needs. For example companies use this instrument for purposes such as bridge financing |
