Which one of the following characteristics applies to commercial paper?

Question

Quizplus · Accepted Answer

Commercial paper is typically issued directly by large-sized firms to meet short-term financing needs. It is usually unsecured, meaning that it is not backed by collateral, and has maturities of 270 days or less. Commercial paper generally offers lower interest rates than comparable bank loans because it is considered to be a lower-risk form of financing for the issuer. Commercial paper is not typically registered with the SEC, and it is issued by firms with high creditworthiness. Therefore, option D is the correct choice.

Which One of the Following Characteristics Applies to Commercial Paper