Answer:
False
Explanation:
The above statement is false that , because it is normally unsecured , commercial paper is only offered by firms with no credit ratings.
Commercial paper is an unsecured promissory note issued by the good reputed companies . It is for short term . The time period of commercial paper is 15 days to 12 months .
A company cannot issue commercial paper if the credit rating is no longer . The face value of commercial paper is of rupees five lakh . It is minimum face value. The rates of commercial paper is usually cheaper . The commercial paper is liquid because of its less risk quality.
The commercial paper also provide exit option to the investors . They also reduce the cost of capital for the company. They are very effective for those who need money in urgent as they are quick way for raising money.
