A debt contract issued by prominent companies that allow the companies to borrow directly from investors is
A)a promissory note.
B)a line of credit.
C)commercial paper.
D)product warranties.
E)returnable deposits.

Question

Quizplus · Accepted Answer

The description fits the definition of commercial paper, which is a short-term debt instrument issued by corporations and other large organizations to finance their short-term cash flow needs. It typically has a maturity of less than 270 days and is sold at a discount from face value. Investors who purchase commercial paper earn interest based on the difference between the discount price and the face value at maturity.

A Debt Contract Issued by Prominent Companies That Allow the Companies