Question : Which of the following is a feature of a commercial paper?
Option 1: Fixed maturity period
Option 2: High liquidity
Option 3: Low interest rate
Option 4: No credit risk
Correct Answer: High liquidity
Solution : The correct answer is (b) High liquidity is a feature of a commercial paper.
Commercial paper is a short-term debt instrument issued by corporations to meet their short-term funding needs. It typically has a maturity period of up to one year. One of the key features of commercial paper is its high liquidity. This means that commercial paper can be easily bought or sold in the secondary market before its maturity, allowing investors to convert it into cash quickly if needed. The high liquidity of commercial paper makes it an attractive investment for investors seeking flexibility and easy access to their funds.
Option 1: Low liquidity
Option 2: High credit rating requirement
Option 3: High interest rate
Option 4: No fixed maturity period
Question : Which of the following is a feature of a treasury bill?
Option 1: High credit risk
Option 2: High interest rate
Option 3: Fixed maturity period
Option 4: No liquidity risk
Question : Which of the following is a feature of a commercial bill?
Option 1: Low credit risk
Option 4: No collateral required
Question : Which of the following is a feature of a certificate of deposit (CD)?
Option 1: High liquidity
Option 2: Low interest rate
Question : Which of the following is a feature of a money market instrument?
Option 2: long maturity period
Option 3: Low liquidity
Option 4: Low interest rate
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