ACCA Financial Management (F9) Certification Practice Exam

Disable ads (and more) with a membership for a one time $4.99 payment

Prepare for the ACCA Financial Management (F9) Certification Exam with engaging quizzes and interactive content. Dive deep into financial management concepts and boost your exam confidence with questions that come with detailed explanations.

Practice this question and more.

Which of the following describes the maturity period for Commercial Paper?

Up to 90 days
Up to 180 days
Up to 270 days
Up to 360 days

The correct answer is: Up to 270 days

Commercial paper is a short-term unsecured promissory note issued by companies to raise funds for working capital needs. The maturity period for commercial paper typically ranges up to 270 days. This characteristic makes it an attractive option for corporations looking to manage their short-term financing requirements without the need for lengthy loan processes or extensive collateral requirements. When companies issue commercial paper, they aim for quick access to cash, and the relatively short maturity period facilitates this. Investors looking for short-term investment options often turn to commercial paper, as it provides a means of placing funds for a limited duration with the potential for return through interest. The option with a maturity period of 270 days accurately reflects the standard upper limit of commercial paper issuance in practice. Therefore, while other choices present longer periods, they do not align with the defined characteristics of commercial paper, making 270 days the correct answer.