Tinix is a well-established petrochemical company that holds excellent credit ratings in the market. It provides short-term financial capital to other big firms by issuing promissory notes that are HYPERLINK "https://en.wikipedia.org/wiki/Collateral_(finance)" collateralized by HYPERLINK "http://www.investopedia.com/terms/p/physicalasset.asp" physical assets. Which of the following short-term financing options is being offered by Tinix in the given scenario?
A) Factoring
B) Asset-backed commercial paper
C) Trade credit
D) Line of credit

Question

Quizplus · Accepted Answer

Tinix is offering asset-backed commercial paper, which is a short-term financing option where promissory notes are collateralized by physical assets.

Tinix Is a Well-Established Petrochemical Company That Holds Excellent Credit