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Which of the following financial instruments is used by companies to raise short-term funds, is unsecured, and usually backed by a good credit rating?
  • a)
    Commercial Papers
  • b)
    Banker's Acceptance
  • c)
    Certificate of Deposit
  • d)
    Treasury Bills
Correct answer is option 'A'. Can you explain this answer?
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Which of the following financial instruments is used by companies to r...
Commercial Papers (CP) are short-term debt instruments issued by corporations to raise funds for their short-term liquidity requirements. They are unsecured and are usually backed by a good credit rating. CPs are typically issued at a discount to their face value and have maturities ranging from 7 days to 1 year.
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Which of the following financial instruments is used by companies to raise short-term funds, is unsecured, and usually backed by a good credit rating?a)Commercial Papersb)Banker's Acceptancec)Certificate of Depositd)Treasury BillsCorrect answer is option 'A'. Can you explain this answer?
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