When compared with bank bills,commercial paper has the advantage:
A) that no interest is paid until maturity, unlike for a bank bill.
B) that a holder of commercial paper has no contingent liability when selling in the money markets.
C) that an issue of commercial paper often has a rollover facility attached, unlike for bank bills.
D) of greater liquidity in the secondary market.

Question

Quizplus · Accepted Answer

One advantage of commercial paper over bank bills is that a holder of commercial paper has no contingent liability when selling in the money markets. In contrast, bank bills may have a contingent liability for the issuing bank. The other choices do not accurately reflect the advantages of commercial paper over bank bills.

When Compared with Bank Bills,commercial Paper Has the Advantage