Which of the Following Is NOT True About Commercial Paper

question 68

Multiple Choice

Which of the following is NOT true about commercial paper?

• A) It is a short-term (six months or less) debt.
• B) It is riskier than a Treasury bill.
• C) It is issued by a "high-quality" corporate borrower.
• D) It pays at a rate about double the Treasury bill.
• E) It can be resold.

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Definitions:

Substitute Products

Products that can serve as replacements for one another; when the price of one increases, the demand for the substitute is likely to increase.

Herfindahl Index

A measure of market concentration used to evaluate the level of competition within an industry, calculated by summing the squares of the market shares of all firms in the industry.

Four-Firm Concentration Ratio

A measure of market concentration that indicates the combined market share of the four largest firms in an industry.

Productive Efficiency

A situation where a good or service is produced at the lowest possible cost.