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    Question

    Which of the following is correct about Commercial

    Papers (CP)?
    A CP is issued by municipalities to meet short term needs Correct Answer Incorrect Answer
    B CP is issued by corporates for short term Correct Answer Incorrect Answer
    C CP is issued by banks to manage liquidity Correct Answer Incorrect Answer
    D CP is issued by Central Government for short term requirements Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. CP can be issued for maturities between a minimum of 7 days and a maximum of up to one year from the date of issue. Commercial Paper are issued by corporates to raise short term funds.

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