Commercial Paper Is a Form of Financing That Consists of Short-Term

question 109

True/False

Commercial paper is a form of financing that consists of short-term, secured promissory notes issued by firms with a high credit standing.

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Definitions:

Debenture

A type of debt instrument that is not secured by physical assets or collateral but based on the creditworthiness and reputation of the issuer.

Unsecured Debt

A type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower.

Maturity

The time at which payment to a bondholder is due from the issuer, according to the bond's terms.

Investment-Quality

A designation given to securities or investments considered to offer lower risk and stable returns.