Which of the Following Is a Requirement for Commercial Paper

question 112

Multiple Choice

Which of the following is a requirement for commercial paper to be considered a negotiable instrument? It must:

• A) be signed in approval by a third party.
• B) contain a conditional promise to pay.
• C) be a promise to pay a specified amount of money.
• D) be an oral agreement between two or more parties.

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Definitions:

Cost of Equity

The return that investors expect for investing in a company's equity, considering the risk of the investment.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business, rather than being paid out as dividends.

Retained Earnings

Portion of a company's profits that is kept or retained within the company, rather than paid out to shareholders as dividends, for reinvestment in the business or to pay off debt.

Opportunity Cost Principle

The opportunity cost principle denotes the value of the best alternative foregone when a decision is made to pursue a particular action.