Cash and Cash Equivalent

wikipedia

Commercial paper, in the global financial market, is an unsecured promissory note with a fixed maturity of no more than 270 days.

Commercial paper is a money-market security issued (sold) by large corporations to get money to meet short-term debt obligations (for example, payroll), and is backed only by an issuing bank or corporation's promised to pay the face amount on the maturity date specified on the note. Since it is not backed by collateral, only firms with excellent credit ratings from a recognized credit rating agency will be able to sell their commercial paper at a reasonable price. Commercial paper is usually sold at a discount from face value, and carries higher interest repayment rates than bonds. Typically, the longer the maturity on a note, the higher the interest rate the issuing institution pays. Interest rates fluctuate with market conditions, but are typically lower than banks' rates.

Commercial paper – though a short-term obligation – is issued as part of a continuous rolling program, which is either a number of years long (as in Europe), or open-ended (as in the U.S.).[1]

www.Investinganswer.com

Commercial paper is an unsecured and discounted promissory note issued to finance the short-termcredit needs of large institutional buyers. Banks, corporations and foreign governments commonly use this type of funding.

Commercial Paper

Commercial paper is the most prevalent form of security in the money market, issued at a discount, with a yield slightly higher than Treasury bills. The main issuers of commercial paper are finance companies and banks, but also include corporations with strong credit, and even foreign corporations and sovereign issuers. The main buyers of commercial paper are mutual funds, banks, insurance companies, and pension funds. Because commercial paper is usually sold in round lots of $100,000, very few retail investors buy paper.

Commercial paper are unsecured promissory notes for a specified amount to be paid...