[This is part of the series: The Complete Guide To Economics 101.]
What is commercial paper?
Commercial Paper is a type of short-term debt instrument that is issued by a corporation in order to finance a short-term liability.
For example, a large firm might sell a $50 million IOU – with $50.5 million due in 250 days.
There is no credit rating because these debts are only backed by the issuing firm.
Commercial paper is a money market type of financial asset.