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      Question

      Commercial Paper (CP) is

      a:
      A Long-term equity instrument Correct Answer Incorrect Answer
      B Short-term, unsecured debt instrument Correct Answer Incorrect Answer
      C Long-term secured bond Correct Answer Incorrect Answer
      D Government security Correct Answer Incorrect Answer
      E Derivative instrument Correct Answer Incorrect Answer

      Solution

      Commercial Paper is an unsecured, short-term money market instrument issued by corporations to raise funds typically for a period of up to one year. It is not backed by collateral (unsecured) and is issued at a discount to its face value.

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