Foundations of Financial Management Study Set 6
Quiz 8: Sources of Short-Term Financing
Issuers of commercial paper can be divided into finance companies and industrial or utility firms.
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Monthly instalment loans usually increase the effective rate of borrowing by approximately 2 times the stated rate.
Commercial paper represents secured short-term borrowing by large companies.
The prime rate has been tied to market interest rates to better relate the interest rate to banks' cost of funds.
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