Short-Term Paper

AAA

DEFINITION of 'Short-Term Paper'

Financial instruments typically with original maturities of less than nine months. Short-term paper is typically issued at a discount and provides a low-risk investment alternative. Examples of short-term paper include U.S. Treasury bills and negotiable instruments issued by financial and non-financial corporations, such as commercial bills, promissory notes, bills of exchange and certificates of deposit.

INVESTOPEDIA EXPLAINS 'Short-Term Paper'

The majority of financial institutions rely on being able to roll over short-term paper for their day-to-day financing needs. During the U.S. financial-market meltdown of 2008, institutions essentially halted issuing short-term paper, and the U.S. government had to intervene to provide liquidity for corporations caught without the means to finance operations.

RELATED TERMS
  1. Paper Dealer

    A market maker that buys and sells extremely short-term corporate ...
  2. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
  3. Asset-Backed Commercial Paper - ...

    A short-term investment vehicle with a maturity that is typically ...
  4. Discount

    The condition of the price of a bond that is lower than par. ...
  5. Liquidity

    1. The degree to which an asset or security can be bought or ...
  6. Bailout

    A situation in which a business, individual or government offers ...
RELATED FAQS
  1. Did the repeal of the Glass-Steagall Act contribute to the 2008 financial crisis?

    The repeal of the Glass-Steagall Act was a minor contributor to the financial crisis, if it contributed to the crisis at ... Read Full Answer >>
  2. What is the difference between a company's annual return and its annualized return?

    For most investors, determining whether an investment in a particular company or mutual fund is worthwhile comes down to ... Read Full Answer >>
  3. How did moral hazard contribute to the financial crisis of 2008?

    The financial crisis of 2008 was the result of a wide range of contributing factors. One significant factor leading up to ... Read Full Answer >>
  4. Why would growth investors be attracted to the electronics sector?

    Growth investors gravitate toward the electronics sector because its higher-than-average volatility, particularly in the ... Read Full Answer >>
  5. How did the Glass-Steagall Act affect commercial and investment banking?

    The Glass-Steagall Act limited commercial banks' ability to engage in investment practices. This policy was implemented following ... Read Full Answer >>
  6. What are some examples of debt instruments?

    Individuals, businesses and governments use common types of debt instruments, such as loans, bonds and debentures, to raise ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Asset-Backed Commercial Paper Carries High Risk

    Asset-backed commercial paper has characteristics that make it much more risky than traditional commercial paper.
  2. Bonds & Fixed Income

    5 Signs Of A Credit Crisis

    These indicators can illuminate the depth and severity of problems in the credit markets.
  3. Mutual Funds & ETFs

    Top Mortgage-Backed Securities ETFs

    Investing in mortgage-backed securities has many advantages, but studying their history may make you wary.
  4. Fundamental Analysis

    Young Investors: Should You Care About Dividends?

    If you're a young investor, you may want to consider a non-traditional approach to investing.
  5. Personal Finance

    How To Calculate Beta Of A Private Company

    We explain two methods for calculating the beta of a private company.
  6. Investing Basics

    Explaining Fixed Income

    A person living off a fixed income is usually a retiree receiving a fixed, steady monthly inflow of cash.
  7. Investing Basics

    How to Calculate Risk Premium

    Think of a risk premium as a form of hazard pay for risky investments.
  8. Investing Basics

    Understanding Risk-Return Tradeoff

    The essence of risk-return tradeoff is embodied in the common phrase “no risk, no reward.”
  9. Mutual Funds & ETFs

    Is the DSUM Yuan Fixed Income ETF a Good Bet?

    An an depth look at PowerShares Chinese Yuan Dim Sum Bond ETF and its risks.
  10. Trading Strategies

    Market Timing Tips & Rules You Should Know

    Market timing rules benefit investments by finding the best prices and times to take exposure and book profits.

You May Also Like

Hot Definitions
  1. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
  2. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  3. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  4. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  5. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
Trading Center