Class 12 Finance Important Chapter 18 Fee-based Financial Services

Class 12 Finance Important Chapter 18 Fee-based Financial Services Solutions English Medium As Per The New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 12 Finance Important Solutions in English and select need one. AHSEC Class 12 Finance Additional Notes Download PDF. HS 2nd Year Banking Additional Solutions.

Class 12 Finance Important Chapter 18 Fee-based Financial Services

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 12 Banking Additional Question Answer are part of All Subject Solutions. Here we have given HS 2nd Year Finance Important Solutions English Medium for All Chapters, You can practice these here.

Fee-based Financial Services

Chapter: 18

IMPORTANT QUESTION AND ANSWER

Short Questions and Answers: 

1. What are fee-based financial services?

Ans: Fee-based financial services are those provided by firms or institutions with specialized expertise. These firms charge a fee for offering services like stock broking, credit rating, and merchant banking, without directly dealing with the funds or assets of their clients.

2. Who regulates stock brokers in India?

Ans: Stock brokers in India are regulated by the Securities and Exchange Board of India (SEBI), which issues trading licenses and ensures compliance with statutory guidelines for fair and transparent functioning in the stock market.

3. What is the main function of a stock broker?

Ans: The primary function of a stock broker is to act as an intermediary between buyers and sellers of securities, facilitating transactions on the stock exchange in exchange for a commission called brokerage.

4. Name any two credit rating agencies in India.

Ans: Two well-known credit rating agencies in India are:

(i) Credit Rating Information Services of India Ltd. (CRISIL)

(ii) Investment Information and Credit Rating Agencies of India (ICRA)

5. What does credit rating assess?

Ans: Credit rating assesses a borrower’s capability and willingness to pay interest and repay the principal amount on time, helping investors decide about investing in debt instruments issued by companies.

6. Mention any two factors considered for credit rating.

Ans: Two factors considered for credit rating are:

(i) History of the organisation.

(ii) Quality of assets.

7. What is the main source of earnings for merchant bankers?

Ans: Merchant bankers primarily earn fees charged from their clients for providing financial advisory and related services, rather than earning from interest as commercial banks do.

8. What is lease finance?

Ans: Lease finance is an arrangement where a merchant banker (lessor) provides equipment to a client (lessee) for use, and in return, the lessee pays rent for a mutually agreed period.

9. Define project counselling as a function of merchant bankers.

Ans: Project counselling involves assisting clients in identifying promising projects, preparing feasibility studies, obtaining licenses, and guiding on mergers, acquisitions, and takeovers.

10. How are commercial banks different from merchant bankers regarding customers?

Ans: Commercial banks serve individuals, firms, governments, and corporate clients, whereas merchant bankers primarily cater to corporate bodies and high net-worth individuals.

Fill in the Blanks:

1. Fee-based financial services are those services where the institution charges a ________ from the client for the expertise offered.

Ans: Fee.

2. The primary regulator of stock brokers in India is the ________.

Ans: Securities and Exchange Board of India (SEBI).

3. ________ is the assessment of a borrower’s capability to repay debt, provided by specialized agencies.

Ans: Credit rating.

4. The main earnings of merchant bankers come from ________ charged to clients for services rendered.

Ans: Fees.

5. Stock brokers act as ________ between buyers and sellers of securities.

Ans: Intermediaries.