Asked by Dolly Rodriguez on Jul 09, 2024
Verified
The interest rate on commercial paper normally exceeds the prime rate.
Interest Rate
The percent of principal charged by the lender for the use of its money.
Prime Rate
The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark in lending.
- Get to know the array of short-term financial avenues and their specific aspects.
Verified Answer
MW
Megan WhitlocjJul 13, 2024
Final Answer :
False
Explanation :
Commercial paper typically offers lower interest rates compared to the prime rate because it is an unsecured form of short-term borrowing used by corporations with high credit ratings, implying lower risk.
Learning Objectives
- Get to know the array of short-term financial avenues and their specific aspects.
Related questions
Trust Receipts Identify the Specific Units of Inventory Pledged as ...
Factoring Involves the Sale of Accounts Receivable by the Firm ...
Bank Credit Is a Minor Source of Short-Term Financing for ...
Which of the Following Methods CANNOT Be Employed by Lenders ...
Provide a Definition for the Term Inventory Loan