Which of the following statements concerning commercial paper is false?
A)Commercial paper generally is written for terms less than 270 days.
B)Commercial paper generally carries an interest rate below the prime rate.
C)Commercial paper is sold to money market mutual funds, as well as to other financial institutions and nonfinancial corporations.
D)Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.

Question

Quizplus · Accepted Answer

Commercial paper is typically issued by firms with high credit ratings, as it is unsecured and relies on the issuer's creditworthiness. Not all firms can issue commercial paper, especially those with lower credit ratings.

Which of the Following Statements Concerning Commercial Paper Is False