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    Question

    Consider the following statements about Commercial

    Paper? I. It was introduced in India in 1900. II. It is an unsecured money market instrument. III. It is a type of short-term borrowing. Which of the following statements is/are correct?
    A I Correct Answer Incorrect Answer
    B II Correct Answer Incorrect Answer
    C III Correct Answer Incorrect Answer
    D All are correct Correct Answer Incorrect Answer
    E None of the statements are correct Correct Answer Incorrect Answer

    Solution

    Commercial Paper is an unsecured money market instrument issued in the form of a promissory note. Commercial Paper was introduced in India in 1990 with a view to enabling highly rated corporate borrowers to diversify their sources of short-term borrowings and to provide an additional instrument to investors. Commercial paper is a money-market security issued by large corporations to obtain funds to meet short-term debt obligations (for example, payroll) and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.  

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