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Highlight the limitations of using commercial paper as a form of short-term credit.

Highlight the limitations of using commercial paper as a form of short-term credit.

Answers

- During economic boom when liquidity is high, it is difficult to sell the commercial paper.
- It is used only by “blue chip” firms to raise short term capital
- For the lender it is unsecured short term financial instrument
- In Kenya the use of commercial paper to raise short term credit is subject to regulatory restrictions by capital market authority.

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Kavungya answered the question on April 16, 2021 at 13:34

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