One of the reasons that so much commercial paper is outstanding is because: many

Question

One of the reasons that so much commercial paper is outstanding is because: many banks prefer to lend to small and mid-sized companies because they can charge higher interest rates.    commercial paper is generally unsecured which gives firms more flexibility if they suddenly want to sell fixed assets. companies with strong credit ratings can generally borrow money at a lower interest rate by issuing commercial paper than by directly borrowing from banks. none of these are reasons why commercial paper is outstanding.

Explanation / Answer

companies with strong credit ratings can generally borrow money at a lower interest rate by issuing commercial paper than by directly borrowing from banks

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