BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It is an additional instrument to the investing community.
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It is an unsecured instrument issued in the form of promissory note.
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The highly rated corporate borrowers can raise short term funds through this instrument.
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All of the above
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Detailed explanation-1: -It is a short-term money market tool, including a promissory note and a set maturity. It acts as an evidence certificate of unsecured debt. It is subscribed at a discount rate and can be issued in an interest-bearing application.
Detailed explanation-2: -There are four types of commercial paper: promissory notes, drafts, checks, and certificates of deposit (CDs).
Detailed explanation-3: -Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.
Detailed explanation-4: -Final answer: High degree of liquidity is not a feature of the commercial bills.
Detailed explanation-5: -Detailed Solution. The correct answer is 1 only. A Commercial Paper (CP) is an unsecured loan raised by firms in money markets through instruments issued in the form of a promissory note.