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Question : Case Study 22:

DEF Ltd. is a well-established company planning to expand its global operations through acquisitions.

Question : 

To finance its acquisition plans, DEF Ltd. is evaluating short-term financing options. Which money market instrument might it use?

Option 1: Commercial paper
 

Option 2: Call money
 

Option 3: Treasury bill

 

Option 4: Corporate bond


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Commercial paper


Solution : The correct answer is (a) Commercial paper

Commercial paper is a short-term unsecured promissory note issued by corporations to raise funds quickly. It is a common choice for businesses looking for short-term financing to support various operational needs, including acquisitions. It provides a quick and cost-effective way to access funds, making it suitable for financing acquisition plans in the short term.

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