1.Which segment of the Money Market involves short-term borrowing by corporations? A. Treasury bills (T-bills) B. Commercial paper (CP) C. Certificates of deposit (CD) D. Repurchase agreements (Repos)
Question
1.Which segment of the Money Market involves short-term borrowing by corporations? A. Treasury bills (T-bills) B. Commercial paper (CP) C. Certificates of deposit (CD) D. Repurchase agreements (Repos)
Solution
The segment of the Money Market that involves short-term borrowing by corporations is B. Commercial paper (CP). Commercial paper is a type of unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities.
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