What are the 4 types of commercial paper?

As per the Uniform Commercial Code (UCC), commercial papers are of four kinds –

  1. Drafts
  2. Cheques
  3. Promissory Notes
  4. Certificate of Deposits

On the basis of Security Commercial Papers are of two types – 

  1. Unsecured commercial paper – also known as traditional Papers issued without any collateral.
  2. Secured Commercial Paper – also known as Asset-backed commercial papers (ABCP). These are collateralized by other financial assets.

Further Readings – 

  1. Types of Cheque in Indian Banking System
  2. Chequebook Diplomacy
  3. Financial Market

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