Which of the Following Statements Regarding Commercial Paper Is FALSE

question 3

Multiple Choice

Which of the following statements regarding commercial paper is FALSE?

• A)With dealer paper,dealers sell the commercial paper to investors in exchange for a spread (or fee)for their services.
• B)With dealer paper,the spread increases the proceeds that the issuing firm receives,thereby decreasing the effective cost of the paper.
• C)The minimum face value of commercial paper is $25,000,and most commercial paper has a face value of at least $100,000.
• D)With direct paper,the firm sells the security directly to investors.

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