One Factor Contributing to the Rapid Growth of the Commercial

question 52

Multiple Choice

One factor contributing to the rapid growth of the commercial paper market since 1970 is

• A)the fact that commercial paper has no default risk.
• B)improved information technology making it easier to screen credit risks.
• C)government regulation.
• D)FDIC insurance for commercial paper.

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Definitions:

One-Time Added Profit

A temporary increase in earnings that a company experiences from a singular event or transaction, not expected to recur in the normal course of business.

Anticipates

The action of foreseeing or preparing for future events or needs.

Marginal Cost

The cost incurred by producing one additional unit of a product or service, crucial for decision-making in production and pricing strategies.

Marginal Benefit

The additional satisfaction or value obtained from acquiring one more unit of a product or service.