Commercial paper is typically offered at a long-term


Which of the following statements is CORRECT?

a. Commercial paper is typically offered at a long-term maturity of at least five years.

b. Trade credit is provided only to relatively large, strong firms.

c. Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.

d. Short-term debt is favored by firms because, while it is generally more expensive than long-term debt, it exposes the borrowing firm to less risk than long-term debt.

e. Commercial paper is a form of short-term financing that is primarily used by large, strong, financially stable companies.

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Financial Management: Commercial paper is typically offered at a long-term
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