Commercial paper is very popular with many firms because

Question

Quizplus · Accepted Answer

Commercial paper can typically be issued at a lower interest rate than other types of borrowing, including bank loans, which makes it an attractive option for firms looking to raise funds at a lower cost. However, commercial paper is typically used for short-term borrowing needs and does not satisfy a firm's need for long-term funds. Additionally, while commercial paper does not require a line of credit from a bank, it is not necessarily "basic" to roll over in times of economic turmoil as it can be difficult to find buyers for commercial paper in uncertain market conditions.

Commercial Paper Is Very Popular with Many Firms Because