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      Question

      Commercial Paper (CP) is an unsecured money market

      instrument issued in the form of a promissory note. What is the minimum maturity period for which a Commercial Paper can be issued?
      A 3 days Correct Answer Incorrect Answer
      B 4 days Correct Answer Incorrect Answer
      C 7 days Correct Answer Incorrect Answer
      D 10 days Correct Answer Incorrect Answer

      Solution

      Commercial Paper (CP) was introduced in India in 1990 to enable highly rated corporate borrowers to diversify their sources of short-term borrowings. CP can be issued for maturities between a minimum of 7 days and a maximum of one year from the date of issue. It can be issued in denominations of β‚Ή5 lakh or multiples thereof, with the amount invested by a single investor not being less than β‚Ή5 lakh (face value).

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