Asked by
Mackenzie Porter
on Nov 06, 2024
Verified
Which of the following is true of commercial paper?
A) It is the most popular long-term investment for small businesses.
B) It acts as a verbal promise to pay a specific amount of money.
C) It is backed only by the name and reputation of the issuing company.
D) It is only sold to sole proprietors and small businesses.
E) It is only sold for durations of two years or more.
Commercial Paper
An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, inventories, and meeting other short-term liabilities.
Long-Term Investment
Financial assets or securities that are held for an extended period, typically for several years or more, with the expectation of substantial returns.
- Understand the concept and usage of commercial paper and other short-term financing instruments.
Verified Answer
AA
Learning Objectives
- Understand the concept and usage of commercial paper and other short-term financing instruments.