Although Commercial Paper Is Unsecured,the Companies That Issue This Short-Term

question 66

Multiple Choice

Although commercial paper is unsecured,the companies that issue this short-term security are:

• A) typically known to repay all defaults.
• B) large firms of top credit quality.
• C) small firms of top credit quality.
• D) firms that have government-sponsored guarantees for the debt.

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Definitions:

Revealed Preferred

A theory in economics that preferences of consumers can be understood from their purchasing habits and choices, as observed from actual market behavior.

WARP

The Weak Axiom of Revealed Preference, a concept in microeconomics that asserts if a consumer prefers bundle A over bundle B when both are affordable, then the consumer will not choose B over A when B's price decreases making it more affordable.

Bundle

A group or collection of items that are offered together as a single package.

Laspeyres Price Index

A price index that measures the relative price change of a basket of goods and services, using the quantities from the base period.