Q.An unsecured, short-term promissory note issued at a discount by large, highly rated companies to meet their working-capital requirement, as a cheaper alternative to short-term bank borrowing, is known as:
(A) Treasury Bill
(B) Commercial Paper
(C) Call Money
(D) Preference Share

An unsecured promissory note issued by a company itself (not the government or a bank) to fund working capital is Commercial Paper.

Check the issuer and the purpose — a company issuing its own short-term note for working capital rules out the other three.

Commercial Paper is an unsecured, short-term promissory note issued by large, financially strong, highly rated companies to raise funds directly from the money market, usually to meet working-capital needs, as a cheaper alternative to bank borrowing. Like a Treasury Bill, it is issued at a discount and redeemed at face value.

Option-by-option analysis:

• (A) Incorrect — a Treasury Bill is issued by the government, not by a company.
• (B) Correct — this exactly matches Commercial Paper.
• (C) Incorrect — Call Money is extremely short-term borrowing/lending BETWEEN banks, not a company's own promissory note.
• (D) Incorrect — a Preference Share is a long-term capital-market ownership instrument, not a short-term debt note.