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Sources Of Business Finance

Question
CBSEENBS11004358

Which is not the limitation of commercial paper ?
  • Only financial sound companies with a good reputation can issue this security.
  • The size of money that can be raised through commercial papers is limited.
  • Companies can also invest their excess money in discounting the commercial papers and earn a good amount of return.
  • Commercial papers are an internal method of financing.

Solution

C.

Companies can also invest their excess money in discounting the commercial papers and earn a good amount of return.