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Question
As commercial paper is a freely transferable instrument, it has ________ liquidity.
As commercial paper is a freely transferable instrument, it has ________ liquidity.
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Solution
The correct option is D High
Commercial paper is an unsecured promissory note given by a firm to raise finances for a short period of time. Only financially sound and highly rated firms can raise money through commercial papers. The size of money that can be raised through commercial paper is limited to the excess liquidity available with the suppliers of funds at a particular time.
Commercial paper is an unsecured promissory note given by a firm to raise finances for a short period of time.
Only financially sound and highly rated firms can raise money through commercial papers. The size of money that can be raised through commercial paper is limited to the excess liquidity available with the suppliers of funds at a particular time.
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