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What is commercial paper?

Commercial paper is basically a short-term unsecured note issued by companies with a promise to pay back the note at a specific point in time. Commercial paper is rarely issued for longer than 270 days. Commercial paper can be risky from the investors perspective because there is typically no collateral that backs commercial paper.

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  • What are examples of debt securities?

    A debt security is any security that is representing a creditor relationship with an outside entity. Examples of debt securities include corporate bonds, redeemable preferred stock, commercial paper, convertible debt, and government securities.