Investment VehiclesQuestion 34 of 110
Commercial paper is best described as which of the following?
a.A long-term corporate bond secured by real estate
b.A government-guaranteed savings instrument
c.Short-term, unsecured corporate debt used for near-term financing
d.A perpetual security with no maturity date
Explanation
Commercial paper is short-term unsecured corporate debt, typically maturing in 270 days or less, used to fund short-term needs like payroll and inventory. It is a money-market instrument issued at a discount. It is not government guaranteed and carries the issuer's credit risk.
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