Answer (C) is correct . Commercial paper is the term for the short-term (typically less than 9 months), unsecured, large denomination (often over $100,000) promissory notes issued by large, credit-worthy companies to other companies and institutional investors. In many instances, the maturity date is only a few days after issuance.
Answer (A) is incorrect because An agency security is issued by a corporation or agency created by the U.S. government. Examples are government securities issued by the bodies that finance mortgages, such as the Federal National Mortgage Association (Fannie Mae).
Answer (B) is incorrect because Bankers’ acceptances are drafts drawn on deposits at a bank. The acceptance by the bank guarantees payment at maturity. They are normally used to finance a specific transaction.
Answer (D) is incorrect because A repurchase agreement involves a secured loan to a government securities dealer. It allows the buyer to retain interest income although the seller-dealer can repurchase after a specified time.
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