The Yield on Commercial Paper Is Generally Higher Than the Yield

question 299

Multiple Choice

The yield on commercial paper is generally higher than the yield on

• A) negotiable CDs.
• B) a corporate bond.
• C) common stock.
• D) a Treasury bill.

---

Definitions:

Negotiable Instrument

A written agreement promising to pay a designated sum of money, either upon request or at a fixed future date, with the obligor's name mentioned on the document.

Indorsement in Trust

A specification on a negotiable instrument where the indorsement indicates that the endorsee has trustee status, making them responsible for managing the instrument according to trust terms.

Bearer Instrument

A negotiable financial instrument that designates payment to whoever holds the instrument, not requiring ownership to be registered with the issuer.

Indorsed

The act of signing one's name on the back of a check or other negotiable instrument for the purpose of transferring rights or entitlements.