Financial Markets · Class 12 · CBSE · Commerce Business Studies
A large and creditworthy company wants to raise short-term funds through an unsecured promissory note issued directly to investors. Which money marke…
Practice question from Financial Markets (Class 12 · CBSE · Commerce Business Studies), with the correct answer and a step-by-step solution.
medium · MCQ · Q-DA1E83
A large and creditworthy company wants to raise short-term funds through an unsecured promissory note issued directly to investors. Which money market instrument should it use?
- A.Certificate of deposit
- B.Commercial paperCorrect answer
- C.Call money
- D.Government security
Solution
Commercial paper is an unsecured promissory note issued by large and creditworthy companies to raise short-term funds. It is a money market instrument.
More from Financial Markets
- Which of the following is a money market instrument issued by the Government of India to meet its short-term financial requirements?
- A company offers its shares to the public for the first time to raise fresh capital. In which market does this transaction take place?
- Which action best represents the regulatory function of the Securities and Exchange Board of India (SEBI)?
- Differentiate between the primary market and the secondary market on the basis of the nature of transactions and the flow of funds.
Practise more Business Studies
Sign up free for adaptive practice on this chapter, with instant feedback and hints on every question.
Start practising freeFree to start · No credit card needed