Question

____ is a short-term debt instrument issued only by well-known, creditworthy firms and is normally issued to provide liquidity or finance a firm's investment in inventory and accounts receivable. a. A banker's acceptance be. A corporate bond c. Commercial paper d. A Treasury bill

Answer 1

Answer:

Commercial Paper.

Explanation:

A commercial Paper is an unsecured and negotiable money market instrument issued in the form of a promissory note. Are issued by companies to raise short term funds for meeting working capital requirements.

Benefits to the issuer:

-low interest expenses

-access to short term funding

-flexibility and liquidity

-investor recognition

-ease and low cost of establishment

-no collaterals

Benefits to the investor:

-higher yield

-portfolio diversification

-flexibility

-liquidity