Question : Case Study 5:

LMN Corporation is a multinational conglomerate looking to manage its currency exposure effectively.

Question : 

If LMN Corporation decides to issue short-term debt to finance its international operations, which money market instrument might it use?

Option 1: Corporate bond
 

Option 2: Call money
 

Option 3: Treasury bill

 

Option 4: Commercial paper


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Commercial paper


Solution : The correct answer is (d) Commercial paper

If LMN Corporation decides to issue short-term debt to finance its international operations, it might use commercial paper as a money market instrument. Commercial paper is a short-term unsecured promissory note issued by corporations and financial institutions to meet short-term funding needs. It is a common choice for companies seeking short-term financing to support their operations, including international ventures. Commercial paper typically has maturities ranging from a few days to 270 days.

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