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. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
  3. Liquidity

    1. The degree to which an asset or security can be bought or ...
  4. Discount

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

    A market maker that buys and sells extremely short-term corporate ...
  6. Bailout

    A situation in which a business, individual or government offers ...
Related Articles
  1. Asset-Backed Commercial Paper Carries ...
    Mutual Funds & ETFs

    Asset-Backed Commercial Paper Carries ...

  2. 5 Signs Of A Credit Crisis
    Bonds & Fixed Income

    5 Signs Of A Credit Crisis

  3. Human Capital, An Important Asset For ...
    Investing Basics

    Human Capital, An Important Asset For ...

  4. Hypothesis Testing in Finance: Concept ...
    Active Trading Fundamentals

    Hypothesis Testing in Finance: Concept ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center