A commercial paper is sold on an __________ basis and does not contain any restrictive conditions.

Secured

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Unsecured

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Both a and b

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None of the above

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Solution

The correct option is A Unsecured
Commercial paper emerged as a source of short-term finance in our country in the early nineties.
Commercial paper is sold on an unsecured basis and does not contain any restrictive conditions. It is issued by one firm to another business firm, insurance companies, banks etc.

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