Which of the Following Statements Is FALSE

question 45

Multiple Choice

Which of the following statements is FALSE?

• A)Unlike long-term debt,because of its short maturity,commercial paper is not rated by credit rating agencies.
• B)The interest on commercial paper is typically paid by selling it at an initial discount.
• C)Commercial paper is short-term,unsecured debt used by large corporations that is usually a cheaper source of funds than a short-term bank loan.
• D)Extending the maturity of commercial paper beyond 270 days triggers a registration requirement with the Securities and Exchange Commission (SEC),which increases issue costs and creates a time delay in the sale of the issue.

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Definitions:

Regulation

Rules or directives made and maintained by an authority to control or manage activities, often to protect public interests.

Protect Competition

Measures and policies established to ensure fair competition within markets, preventing monopolies and fostering innovation and fairness.

Social Regulation

Regulations that aim to protect public welfare, including health and safety standards, environmental protections, and consumer rights.

No Free Lunch

Refers to the idea that one cannot get something for nothing; for every benefit or good received, a cost, either direct or indirect, is incurred.