commercial paper (Meaning)
commercial paper (n)
an unsecured and unregistered short-term obligation issued by an institutional borrower to investors who have temporarily idle cash
Synonyms & Antonyms of commercial paper
No Synonyms and anytonyms found
commercial paper Sentence Examples
- Commercial paper is a short-term debt instrument issued by corporations to raise funds for operational needs.
- Investors often turn to commercial paper for its relatively low risk and higher returns compared to other short-term investments.
- Commercial paper typically matures within a few days to a year, making it an attractive option for companies seeking temporary financing.
- The issuance of commercial paper allows businesses to access liquidity quickly without the need for lengthy approval processes.
- Commercial paper markets provide a platform for trading these financial instruments among institutional investors.
- Credit ratings play a crucial role in determining the interest rates and terms associated with commercial paper issuance.
- Companies with strong credit ratings can issue commercial paper at lower interest rates, reducing borrowing costs.
- Commercial paper is commonly used to finance working capital needs, such as inventory purchases and payroll expenses.
- The Federal Reserve occasionally intervenes in the commercial paper market to stabilize liquidity and support financial markets during periods of stress.
- Despite its advantages, commercial paper carries some risks, including credit risk and market volatility, which investors should carefully consider.
FAQs About the word commercial paper
an unsecured and unregistered short-term obligation issued by an institutional borrower to investors who have temporarily idle cash
No synonyms found.
No antonyms found.
Commercial paper is a short-term debt instrument issued by corporations to raise funds for operational needs.
Investors often turn to commercial paper for its relatively low risk and higher returns compared to other short-term investments.
Commercial paper typically matures within a few days to a year, making it an attractive option for companies seeking temporary financing.
The issuance of commercial paper allows businesses to access liquidity quickly without the need for lengthy approval processes.
