SIE (Securities Industry Essentials) Practice Exam

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What is the maximum maturity of commercial paper?

90 days
180 days
270 days
360 days

The correct answer is: 270 days

Commercial paper is a short-term debt instrument typically issued by large corporations. It is unsecured and typically has a maturity of 270 days or less. This means that commercial paper is due in less than 270 days from the date it is issued. It is a popular funding source for corporations as it offers a low-cost alternative to bank loans. Options A, B, and D are incorrect as they exceed the maximum maturity of commercial paper. Option C is correct as it is the longest maturity allowed for commercial paper issuance.