Products & RisksQuestion 50 of 125
A money market instrument such as commercial paper is best described as:
a.A long-term equity security
b.A short-term, unsecured corporate debt obligation, typically maturing in 270 days or less
c.A municipal general obligation bond
d.A federally insured deposit
Explanation
Commercial paper is short-term, unsecured corporate debt issued at a discount, usually with maturities of 270 days or less so that it is exempt from full registration under the Securities Act of 1933. It is a money market instrument used by corporations for short-term financing.
Practice all 125 questions free — no signup required.
Related questions on this topic
- A mortgage-backed pass-through security, such as a GNMA (Ginnie Mae) certificate, passes through to investors:
- Prepayment risk in mortgage-backed securities means that:
- A warrant differs from a right in that a warrant:
- An investor sells 1 XYZ 30 put for a premium of 2. What is the maximum gain and the breakeven point?
- Preferred stock is generally considered more sensitive to interest rate changes than common stock because preferred:
- A collateralized mortgage obligation (CMO) is structured into tranches primarily to:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against FINRA Series 7 General Securities Representative Exam · How we review