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Questions and Answers
Which of the following best describes commercial paper?
Which of the following best describes commercial paper?
- A secured debt instrument issued by a corporation
- An unsecured debt instrument issued by the government
- A long-term debt instrument issued by a corporation
- A short-term debt instrument issued by a corporation (correct)
What is the typical maturity range for commercial paper?
What is the typical maturity range for commercial paper?
- Less than 30 days
- Between 30 and 90 days
- Between 180 and 270 days (correct)
- Between 90 and 180 days
Why is commercial paper considered a low-risk investment?
Why is commercial paper considered a low-risk investment?
- It is backed by the government
- It is secured by the assets of the issuing corporation
- It is issued by companies with high credit ratings (correct)
- It has a long-term maturity
Which of the following rating agencies assesses commercial paper?
Which of the following rating agencies assesses commercial paper?
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How does commercial paper typically trade in relation to its par value?
How does commercial paper typically trade in relation to its par value?
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