Reference no: EM133279059

Assignment:

a. Corporations issue commercial paper, which is a short-term, unsecured debt instrument.

b. Short-term liabilities like payroll, accounts payable, and inventories are typically financed with this method.

c. Commercial paper involves repaying a predetermined sum of money by a predetermined date.

d. The lowest denomination is $100,000. Maturity terms range from one day to 270 days.They usually last 30 days.

e. Typically, commercial paper is issued at a discount to its face value.It reflects the current interest rates in the market.

f. An example of unsecured, short-term debt is commercial paper.

g. Companies frequently use it to pay for payroll, payables, inventory, and other short-term obligations.

h. On commercial paper, maturities range from one day to 270 days, with a 30-day average.
Discounted commercial paper is issued and matures at face value.

i. Commercial paper has a minimum denomination of $100,000 and a fixed interest rate that changes with the market.

j. Understanding Commercial Paper The first commercial paper was introduced more than 150 years ago when New York merchants started selling their short-term obligations to dealers to get the capital they needed to pay for their near-term obligations.