CFO Jorge Sierra needs short-term financing for a large corporation. He decides to issue an unsecured debt instrument of $200,000 to be paid back in 150 days. Jorge is using ________.
A)a mortgage
B)factoring
C)commercial paper
D)retained earnings

Question

Quizplus · Accepted Answer

Commercial paper is a short-term unsecured debt instrument commonly used by large corporations to obtain short-term financing. It typically has a maturity of less than 270 days and is sold in the open market to institutional investors. Mortgages and retained earnings are not relevant for short-term financing needs, while factoring involves selling accounts receivable to a third party and is not a debt instrument.

CFO Jorge Sierra Needs Short-Term Financing for a Large Corporation