Commercial paper is very popular with many firms because Multiple Choice it can usually be issued below the prime rate. there are no required lines of credit at the bank. it satisfies the firm's need for long-term funds. it is very simple to roll over (refinance) in times of economic turmoil.

Question

Justice Riddle

Business

28 November, 21:51

Commercial paper is very popular with many firms because Multiple Choice it can usually be issued below the prime rate. there are no required lines of credit at the bank. it satisfies the firm's need for long-term funds. it is very simple to roll over (refinance) in times of economic turmoil.

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Answers (1)

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Janiyah Duke · Answer 1

Answer:There are no required line of credit at the bank.

It's very simple to roll over (refinance) in times of economic turmoil.

Explanation:

A commercial paper is issued by banks or large companies to finance short term requirements like working capital.

It does not require having a line of credit credit with the bank and can be easily rollover.

However it's rate are normally higher than prevailing prime rate since non financial institutions are involved and it's usually for a short period.