Which of the following statements is CORRECT?

A) Trade credit is provided only to relatively large, strong firms.
B) Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
C) Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.
D) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
E) Commercial paper is typically offered at a long-term maturity of at least five years.

Question

Which of the following statements is CORRECT?

A)	Trade credit is provided only to relatively large, strong firms.
B)	Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.
C)	Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.
D)	Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
E)	Commercial paper is typically offered at a long-term maturity of at least five years.

Quizplus · Accepted Answer

Commercial paper is a short-term unsecured promissory note issued by large, financially stable companies to meet short-term liabilities.

Which of the Following Statements Is CORRECT