Compared to Treasury bills, commercial paper

Question

Quizplus · Accepted Answer

Commercial paper does not have a well-developed secondary market, whereas Treasury bills can easily be bought and sold in the secondary market. Option A is incorrect because commercial paper is considered to have some default risk since it is an unsecured short-term debt instrument. Option C is also incorrect because commercial paper typically offers a higher yield than Treasury bills due to the added default risk. Option D is incorrect because commercial paper tends to sell at a discount to its face value, whereas Treasury bills are sold at a premium.

Compared to Treasury Bills, Commercial Paper