Which of the following statements is incorrect?
A) The maturity of commercial paper is 1 to 170 days.
B) The commercial paper market is ideal for companies with spotted credit history.
C) Commercial paper is a promissory note, usually unsecured, but sometime backed by assets.
D) The issuer of commercial paper can either sell the paper directly to the investor or use a dealer.
E) Many companies have liquidity support of their commercial paper to ensure creditors that money is available to pay off the commercial paper if needed.

Question

Quizplus · Accepted Answer

Commercial paper is typically issued by companies with a high credit rating because it is an unsecured form of borrowing. Companies with a "spotted" or poor credit history are less likely to be able to issue commercial paper because investors look for low-risk, high-credit-quality issuers.

Which of the Following Statements Is Incorrect