Commercial paper that is sold without going through a broker or dealer is known as
A) direct paper.
B) dealer paper.
C) a book-entry transaction.
D) term paper.

Question

Quizplus · Accepted Answer

Direct paper refers to commercial paper that is sold directly by the issuer to the investor without the use of a broker or dealer. This can offer cost savings to both parties by cutting out the middleman. Dealer paper, on the other hand, is commercial paper that is sold through a broker or dealer, who may add a markup to the price in order to cover their own expenses and profit. Book-entry transactions are a method of recording ownership of securities electronically, and term paper is an unrelated term.

Commercial Paper That Is Sold Without Going Through a Broker