A company that issues promissory notes into the short-term debt markets is conducting a transaction in the:
A) commercial paper market.
B) inter-bank market.
C) bills market.
D) official short-term money market.

Question

Quizplus · Accepted Answer

Promissory notes are usually issued by corporations to raise funds in the commercial paper market, which is a short-term debt market. The inter-bank market deals with overnight or very short-term lending between banks. The bills market deals with government-issued securities. The official short-term money market includes various instruments such as treasury bills, certificates of deposit, commercial paper, and inter-bank call money. However, the issuance of promissory notes is mainly associated with the commercial paper market.

A Company That Issues Promissory Notes into the Short-Term Debt