Ace the Canadian Securities Course 2025 - Rock the CSC Practice Exam!

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Question: 1 / 400

Describe Commercial Paper in the financial context.

a protective provision providing that no subsequent mortgage bond issue may be secured by all or part of the company's assets.

a short-term commercial draft sold at a discount.

Commercial paper is a type of short-term promissory note issued by companies to borrow money from investors. It is typically sold at a discount and has a maturity of less than 270 days. This option is correct because it accurately reflects the definition of commercial paper.

Option A is incorrect as it describes a provision for mortgage bond issues and not commercial paper.

Option C is incorrect as it describes a type of savings product with a guaranteed interest rate, which is different from commercial paper.

Option D is incorrect as it describes a type of investment called Guaranteed Investment Certificates (GICs), which also differs from commercial paper.

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a type of savings product that pays a competitive rate of interest and that is guaranteed for one or more years.

the investment for these GICs is evenly divided into multiple-term lengths.

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