Commercial paper is usually issued at a discount, meaning that it is initially sold at a lower price than the company will pay the holder when the paper comes due.

Question

Quizplus · Accepted Answer

This is correct. Commercial paper is typically sold at a discount to its face value, which is the amount that the issuing company will pay to the holder when the paper matures. The discount reflects the cost of financing for the issuing company and provides a return to the investor.

Commercial Paper Is Usually Issued at a Discount, Meaning That