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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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