Firms are able to raise funds through the sale of commercial paper more cheaply than byborrowing from a commercial bank.

Question

Quizplus · Accepted Answer

Commercial paper is a short-term debt instrument issued by corporations at a lower interest rate than borrowing from a commercial bank. This is because commercial paper is typically sold to institutional investors with high credit ratings, who are willing to buy the debt at a lower interest rate due to the low risk involved.

Firms Are Able to Raise Funds Through the Sale of Commercial