ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Commercial paper, also called CP, is a short-term debt instrument issued by companies to raise funds generally for a time period up to one year. It is an unsecured money market instrument issued in the form of a promissory note and was introduced in India for the first time in 1990.

Detailed explanation-2: -Commercial paper is an unsecured, short period debt tool issued by a company, usually for the finance and inventories and temporary liabilities. The maturities in this paper do not last longer than 270 days.

Detailed explanation-3: -A debt instrument is a tool an entity can use to raise capital. It is a documented, binding obligation that provides funds to an entity in return for a promise from the entity to repay a lender or investor in accordance with terms of a contract.

Detailed explanation-4: -What is Commercial Paper? Commercial paper refers to a short-term, unsecured debt obligation that is issued by financial institutions and large corporations as an alternative to costlier methods of funding. It is a money market instrument that generally comes with a maturity of up to 270 days.

Detailed explanation-5: -Debentures are often used to raise short-term capital to fund specific projects. This type of debt instrument is backed only by the credit and general trustworthiness of the issuer. Both bonds and debentures are popular among investors because of their guaranteed fixed rates of income.