Commercial paper is a short-term, unsecured debt instrument issued by corporations to raise funds for immediate needs, such as inventory purchases or operating expenses. Typically, it has a maturity period ranging from a few days to up to 270 days and is sold at a discount to its face value. Investors, including money market funds and financial institutions, often purchase commercial paper because it offers a higher yield than other short-term investments like Treasury bills. Since it is unsecured, only companies with high credit ratings can issue commercial paper, making it a relatively low-risk investment for buyers.