The high quality of commercial paper results in:
A) Comparatively low yields
B) Comparatively high yields
C) Risk-free yields
D) None of the above

Question

Quizplus · Accepted Answer

Commercial paper is a short-term, unsecured debt instrument issued by corporations with high credit ratings. Because of the high credit quality of the issuers, commercial paper tends to offer lower yields compared to other, riskier investments. This is because investors are willing to accept lower returns for the perceived lower risk associated with these high-quality issuers.

The High Quality of Commercial Paper Results In