Which of the Following Is a Correct Statement About Commercial

question 50

Multiple Choice

Which of the following is a correct statement about commercial paper?

• A)Commercial paper is a type of secured promissory note issued by banks to small firms.
• B)The use of commercial paper is limited to a relatively small number of firms that are exceptionally good credit risks.
• C)Maturities of commercial paper vary from two years to four years.
• D)The interest a firm pays on its commercial paper normally is higher than the interest it pays on its long-term bonds.
• E)Commercial paper normally is issued by firms with high financial risks.

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