Question

'An instrument is transferable by endorsement and delivery. It is sold at a discount and redeemed at par'. Identify the instrument.

• A. Commercial Bill
• B. Commercial Paper
• C. T-Bill
• D. Call Money

Answer 1

The correct option is B

Commercial Paper

Commercial Paper: Commercial Paper is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery with a fixed maturity period. It is issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates.