Commercial Paper
Commercial Paper is a form of short-term financing consisting of unsecured promissory notes issued by firms with high credit standings
- The Maturity ranges from 3 to 270 days
- The Denomination is typically $100,000 or more
- Interest on Commercial Paper is determined by the size of the discount (from par value) and the length of time to maturity
- Annual effective rate = [$ Amount Of Discount ($ Par - $ Discount)] x ( 360 Maturity)
- 1994, HarperCollins Publishers