Correct Answer: Both assertion and reason are true, and the reason is the correct explanation of the assertion.

Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.

The assertion is true. Commercial paper is indeed a short-term debt instrument typically issued by corporations and sometimes financial institutions. It's a form of unsecured, short-term borrowing used by companies to finance short-term liabilities.

The reason is true and provides the correct explanation for the assertion. Commercial paper is often used by companies to meet their short-term financing needs, such as funding day-to-day operational expenses, managing cash flow, or addressing short-term liabilities.