The commercial paper issued with low interest rate thus the commercial paper are categorized as ___________?
Correct answer: D. better credit ratingAccounting & Auditing
- A. payables rating
- B. commercial rating
- C. poor credit rating
- D. better credit ratingAccounting & Auditing
Explanation
Commercial paper is normally issued by financially sound companies, so it can attract investors at a lower interest rate. A low rate therefore indicates a better credit rating, while poor-rated issuers must generally offer higher rates.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
In borrowing and lending of federal funds, the federal funds rate is result of function between _____________?
The agreement which incurs the transaction between two parties and promise held that second party will sell security at specific maturity is classified as __________?
The instrument used by Federal Reserve to smooth the money supply and interest rates include ____________?
The price which is paid by the bidders and is accepted by all other bidders is classified as _____________?
The rates of certificate of deposits are mostly negotiated between ___________?
The treasury bills have high liquidity because of ____________?