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A commercial paper with a low interest rate indicates __________?

Commercial paper with a low interest rate reflects that the issuer has a strong financial position and high creditworthiness. Investors demand lower returns from companies with a better credit rating, as the risk of default is minimal.... Read More

1 FINANCE MCQS

A commercial paper with a low interest rate indicates __________?

  • Payables rating
  • Commercial rating
  • Poor credit rating
  • Better credit rating
Correct Answer: D. Better credit rating

Detailed Explanation

Commercial paper with a low interest rate reflects that the issuer has a strong financial position and high creditworthiness. Investors demand lower returns from companies with a better credit rating, as the risk of default is minimal.

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