What is the maximum period for which commercial paper can be issued?

Correct option is C

Commercial Paper (CP) is an unsecured, short-term money market instrument issued by highly rated companies to meet short-term financing needs such as working capital requirements.
As per RBI guidelines, the maximum maturity period of Commercial Paper is 1 year (12 months). The minimum period is 7 days.
Thus, CP can be issued for any period between 7 days and up to a maximum of 1 year, making Option (c) 1 Year the correct answer.
Information Booster
1. Commercial Paper is issued at a discount and redeemed at face value.
2. It is used by companies with strong credit ratings, making it a low-risk instrument.
3. CP helps corporates borrow short-term funds more cheaply than bank loans.
4. Banks, mutual funds, and insurance companies are the main investors.
5. CP forms part of the organised money market regulated by RBI.