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Determine the term- Time Value of Money
If an individual behaves rationally, then he wouldn't equate money in hand today with same value a year from now. As a matter of fact, he would prefer to receive today than receive after one year. Reasons cited by him for preferring to have the money today comprise:
1. Uncertainty of receiving the money later.
2. Preference for consumption today.
3. Loss of investment opportunities.
4. Loss in value because of inflation.
Commercial Paper (CP) is a short-term unsecured promissory note issued in the open market. It also represents the obligation of the issuer. Normally, it is issued
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