By referring to the short term interest rate structure, show how commercial paper can be an attractive form of short-term borrowing for the enterprise

Commercial paper are money market instruments which will be helping the company to have access to short term funds through having access to the money market and they will be providing quick and cost-effective method of raising the working capital for the shorter period of time and this commercial papers are also having no security and hence these are unsecured form of debt capital, which can be raised through money market and they are raised in shorter period of time so they are highly attractive to the organisation.

Investors are also having benefits in association with the commercial paper because they are highly liquid instruments and they will be easily entered and exited into, and it will also mean that these commercial papers are providing with a higher rate of return in the shorter period of time, so it will help the investor in order to protect against those situations where risk associated with default of debt are very high in long term. These commercial also rated instrument so they will help the investor in order to protect themselves against risk in the investing.