Commercial Paper is: a. A formal, committed line of credit extended by a bank or other lending institution b. An informal arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period c. A minimum checking account balance that a firm must maintain with a commercial bank d. A document specifying the terms and conditions of a loan, including the amount, interest rate and repayment schedule e. Unsecured, short term promissory notes of large firms, usually issued in denominations of $100,000,000 or more and having an interest rate somewhat below the prime rate

Question

Marcus Freeman

Business

26 August, 16:45

Commercial Paper is: a. A formal, committed line of credit extended by a bank or other lending institution b. An informal arrangement in which a bank agrees to lend up to a specified maximum amount of funds during a designated period c. A minimum checking account balance that a firm must maintain with a commercial bank d. A document specifying the terms and conditions of a loan, including the amount, interest rate and repayment schedule e. Unsecured, short term promissory notes of large firms, usually issued in denominations of $100,000,000 or more and having an interest rate somewhat below the prime rate

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Answers (2)

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Jaydan Levy · Answer 1

e. Unsecured, short term promissory notes of large firms, usually issued in denominations of $100,000,000 or more and having an interest rate somewhat below the prime rate

Explanation:

Commercial paper is a form of debt financing that may be engaged by an organization. It is usually recognized in the current liabilities section of the balance sheet because it is a short term promissory note issued by organizations (usually large).

It is usually issued in a bid to meet short term liabilities such as accounts payable as they fall due.

Cody Gutierrez · Answer 2

Commercial paper is an unsecured, short-term promisorry notes of large firms, usually issued in denomination of $100,000 or more and having an interest rate somewhat below the prime rate

Explanation:

commercial paper is regarded as unsecured because it does not require collateral but based on the credit rating of the firm.