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What is commercial paper?

Investment Analysis and Portfolio Management

What is commercial paper?

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Commercial Paper : Commercial paper represents short-term unsecured promissory notes issued by firms that are generally considered to be financially strong. Commercial paper usually has a maturity period of 90 days to 180 days. It is sold at a discount and redeemed at par. Hence the implicit rate is function of the size of discount and the period of maturity.

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