Question: Answer the below questions. (a) Why is commercial paper an alternative to short-term bank borrowing for a corporation? (b) What is the difference between directly

Answer the below questions.
(a) Why is commercial paper an alternative to short-term bank borrowing for a corporation?
(b) What is the difference between directly placed paper and dealer-placed paper?
(c) What does the yield spread between commercial paper and Treasury bills of the same maturity reflect?
(d) Why does commercial paper have a maturity of less than 270 days?
(e) What is meant by tier-1 and tier-2 commercial paper?

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a Commercial paper is an alternative to shortterm bank borrowing for a corporation because it gives them another way of borrowing or acquiring funds needed in the immediate future For companies able t... View full answer

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