Which of the Following Is an Advantage of Using Commercial

question 89

Multiple Choice

Which of the following is an advantage of using commercial paper for short-term credit?

• A) The interest rate is usually lower than for equivalent bank loans.
• B) A readily available source of credit for most firms
• C) It is a type of free credit
• D) It can be issued for very small amounts

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Definitions:

Bonds

Fixed income investment products that represent loans made by the investor to the issuer, typically corporate or governmental, for a defined period of time.

Price Level

An all-encompassing average of the present prices in the economy for goods and services.

Nominal Variable

A variable measured in terms of monetary value that has not been adjusted for inflation, reflecting the current price levels.

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of GDP to a country's total supply of money.