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WordNet-Online
Definitions from WordNet | ||||
Definitions from the WebTerm: Commercial PaperDescription:Commercial paper refers to a short-term, unsecured promissory note issued by corporations, financial institutions, or governments to raise funds. It acts as a convenient tool to finance day-to-day operations, such as purchasing inventory or meeting payroll obligations. Commercial paper is typically sold at a discount to face value and has a maturity period of less than a year. It is an integral part of the money market and plays a crucial role in providing liquidity to various entities. Sense 1: Financing InstrumentIn this sense, commercial paper refers to a negotiable instrument used by businesses and institutions to obtain funds quickly and temporarily to meet their short-term financial needs. It serves as an alternative to traditional loans or borrowing from banks. Example sentence: Many large corporations rely on commercial paper to address their short-term financing requirements. Sense 2: Investment OptionCommercial paper can also be seen as an investment option for individuals and institutions looking for relatively low-risk short-term investments. They can purchase commercial paper from issuers and earn interest upon maturity. Example sentence: The investor decided to diversify their portfolio by including commercial paper along with stocks and bonds. Sense 3: Money Market InstrumentAs a money market instrument, commercial paper enables corporations and institutions with strong credit ratings to raise necessary capital quickly and at a lower cost compared to alternative financing methods. Example sentence: The government's issuance of commercial paper contributed to stabilizing the short-term money market during the financial crisis. Related Products:Explore related products on Amazon: | ||||
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