Discussion
The features of the commercial paper are
Answer: D
Correct answer: All of the above
All three statements describe commercial paper correctly. It is an unsecured money market instrument issued in the form of a promissory note, backed by nothing but the issuer's standing - which is why only highly rated corporates can issue it, and why it is a route for them to raise short-term funds more cheaply than by bank borrowing.
From the other side of the market it gives investors an additional short-dated instrument to hold. In India it is issued at a discount to face value with maturities from seven days to one year, and issuers must meet minimum credit rating and net worth conditions.
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