What Is the Term Used for a Short-Term, Unsecured Debt

question 6

Multiple Choice

What is the term used for a short-term, unsecured debt sold by a large company to an intermediary, who then resells the debt to investors in return for a fee for his or her services?

• A) commercial paper
• B) direct paper
• C) dealer paper
• D) unsecured paper

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices.

Market

Any structured exchange where buyers and sellers interact to trade goods, services, or information.

Price

The capital amount projected, necessary, or handed over in trade for something.

Deadweight Loss

The loss in social surplus that occurs when a market is not in efficient equilibrium, often due to externalities, taxes, or subsidies.