- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 4. Fixed-Income Markets for Corporate Issuers
- Subject 1. Short-Term Funding Alternatives
CFA Practice Question
Which of the following statements regarding commercial papers is false?
B. Commercial papers are very thinly traded in the secondary market.
C. Commercial papers with maturities less than 270 days are exempt from SEC registration.
D. Commercial papers are typically zero-coupon instruments.
A. Commercial papers are secured promissory notes.
B. Commercial papers are very thinly traded in the secondary market.
C. Commercial papers with maturities less than 270 days are exempt from SEC registration.
D. Commercial papers are typically zero-coupon instruments.
Correct Answer: A
User Contributed Comments 4
| User | Comment |
|---|---|
| mtcfa | They are notes but they are not secured. They are backed by unused credit lines, but this is not really a form of collateral. |
| jpducros | What's the difference mtcfa ? |
| Jurrens | unused credit lines mean they just have access to the cash, they don't actually have it |
| khalifa92 | unused credit line is liquidity to meet short term debt from banks if they need |