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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 тВ╣5 lakh or multiples thereof, with the amount invested by a single investor not being less than тВ╣5 lakh (face value).

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