Monolith Corp.'s credit rating is so high that it is able to issue ________, which is backed solely by the firm's promise to pay.
A) accounts receivable
B) commercial paper
C) promissory notes
D) trade credit
E) debentures

Question

Quizplus · Accepted Answer

Commercial paper is a short-term unsecured promissory note issued by a company with a high credit rating. As Monolith Corp.'s credit rating is high, it is able to issue commercial paper backed solely by its promise to pay. The other options listed are forms of financing that involve more collateral or security.