ASSEB Class 12 Finance Solved Question Paper 2025 [AHSEC HS 2nd Year Finance Solved Question Paper 2025]

Are you searching for the ASSEB Class 12 Finance Solved Question Paper 2025? If yes, then you are at the right place. Here we provide the AHSEC HS 2nd Year Finance Solved Question Paper 2025 to help students in their exam preparation.

Finance is an important subject for Class 12 Commerce students under the Assam State School Education Board (ASSEB). Solving previous year and model question papers helps students understand the exam pattern, question style, and important topics. That is why we are sharing here the Class 12 Finance 2025 Solved Question Paper, which will act as a valuable study resource.

ASSEB Class 12 Finance Question Paper 2025 – Overview

• Board: Assam State School Education Board (ASSEB)

• Class: 12 (HS 2nd Year)

• Stream: Commerce

• Subject: Finance

• Year: 2025

• Type: Solved Question Paper

AHSEC HS 2nd Year Finance Solved Question Paper 2025

Below we will provide the fully solved question paper for Finance once added. Students can use it as a ready reference for practice and self-study.

ASSEB:2025

FINANCE

Full Marks: 80

Pass Marks: 24

Time: Three hours

The figures in the margin indicate full marks for the questions.

1. Answer any six from the following questions: 1x6=6

(a) Reserve Bank of India (RBI) is the apex monetary institution of India.

(b) State the meaning of e-banking.
Answer: E-banking means doing banking activities like transferring money, checking balance, paying bills, etc. through electronic means like computer or mobile using the internet.

(c) Name the oldest stock exchange of our country.
Answer: The oldest stock exchange of our country is the Bombay Stock Exchange (BSE).

(d) Write the full form of OTCEI.
Answer: The full form of OTCEI is Over The Counter Exchange of India.

(e) Money market deals with the short-term lending and borrowing of funds.
(f) In India, who issues all notes other than one-rupee notes?
Answer: In India, the Reserve Bank of India (RBI) issues all notes other than one-rupee notes.

(g) NSE was set up in which year?
Answer: NSE (National Stock Exchange) was set up in 1992.

(h) What is the liquidity ratio?
Answer: Liquidity ratio means the ratio that shows how easily a company can pay its short-term debts using its liquid assets (cash or things that can be quickly changed into cash).

2. Answer the following questions briefly: 2x4=8

(a) What is the bank rate?
Answer: Bank rate is the rate of interest at which the Reserve Bank of India (RBI) lends money to commercial banks without any security for a long period.

(b) Give two objectives of GICI.
Answer: Two Objectives of GICI are:

1. To provide insurance protection to depositors.

2. To maintain public confidence in the banking system.

(c) What is the secondary capital market?
Answer: The secondary capital market is the market where already issued securities like shares and debentures are bought and sold among investors.

(d) State any two uses of an ATM.
Answer: The two uses of an ATM:

1. To withdraw cash anytime without visiting the bank.

2. To check account balance and mini statements.

3. Answer any four from the following: 3x4=12

(a) Write three objectives of NABARD.
Answer:

1. To provide credit and financial support for rural development.

2. To promote agriculture and rural small industries.

3. To improve the living standard of rural people through development programs.

(b) What is cash credit? Give two advantages of cash credit.
Answer: Cash credit is a type of short-term loan given by banks where a borrower can withdraw money up to a certain limit against security.

Two advantages:

1. Interest is charged only on the amount actually used.

2. It provides flexible and continuous credit facility.

(c) Mention three distinguishing features of the capital market.
Answer:

1. Deals with long-term funds (more than one year).

2. Provides finance to business, industry, and government.

3. Consists of primary and secondary markets.

(d) Write three functions of the Stock Exchange.
Answer:

1. Provides a platform for buying and selling securities.

2. Helps in determining the market value of securities.

3. Ensures liquidity by allowing investors to sell securities anytime.

(e) What are the different functions performed by RBI as a Banker of Government?
Answer:

1. Manages government accounts and public debt.

2. Issues new loans and treasury bills for the government.

3. Acts as an adviser on financial and monetary matters.

(f) Write three differences between scheduled bank and non-scheduled bank.
Answer:

Scheduled Bank	Non-Scheduled Bank
Included in 2nd Schedule of RBI Act, 1934	Not included in 2nd Schedule of RBI Act
Maintain minimum reserve of ₹25 lakh with RBI	No such requirement
Eligible for facilities from RBI	Not eligible for RBI facilities

4. Answer the following: (any six) 5x6=30

(a) Discuss different methods of the note issue of the Central Bank.
Answer: The Central Bank uses different methods for issuing currency notes. The main methods are:

1. Fixed Fiduciary System – Central Bank issues notes up to a fixed amount without keeping any metallic reserve. Beyond that, full backing of gold/silver is required.

2. Proportional Reserve System – A fixed proportion of total currency issued must be backed by gold/silver, and the rest can be backed by government securities.

3. Minimum Reserve System – Central Bank keeps only a minimum reserve of gold and foreign securities, and can issue notes against government securities. (Example: RBI maintains ₹200 crore reserve, of which ₹115 crore in gold).

4. Maximum Fiduciary System – Central Bank is allowed to issue notes up to a maximum fixed limit, beyond which no issue is allowed.

5. Managed Currency System – Currency issue is managed by the Central Bank depending on the needs of the economy, without full metallic backing.

(b) Discuss the functions of foreign exchange market.
Answer: The foreign exchange market performs several important functions:

1. Transfer of Funds – Helps in transferring purchasing power between countries for trade and investment.

2. Credit Facility – Provides short-term credit to importers and exporters to finance foreign trade.

3. Hedging Function – Protects traders from risks of foreign exchange rate fluctuations.

4. Liquidity and Stability – Provides a continuous market for buying and selling foreign currencies, ensuring stability.

5. Promotes International Trade – Facilitates smooth settlement of import-export transactions and encourages global trade relations.

(c) What are the methods of trading in the stock exchange?
Answer: The main methods of trading in the stock exchange are:

1. Floor Trading (Outcry System):
   
   

• Traditional method where brokers gather on the trading floor and buy/sell securities through open shouting and hand signals.

2. Screen-Based Trading (Electronic Trading):
   
   

• Computer terminals are used for buying and selling securities. Orders are matched electronically.

• Example: NSE and BSE in India.

3. Online Trading:
   
   

• Investors can directly buy/sell shares using the internet through broker websites or apps.

4. Negotiated Deal:
   
   

• Trading takes place between two parties directly at mutually agreed prices, later reported to the exchange.

5. Spot and Forward Trading:
   
   

• Spot trade – delivery and payment are done immediately.

• Forward trade – settlement takes place at a future date at pre-decided prices.

(d) State the conditions under which a banker should refuse payment of cheque.
Answer: A banker may refuse to honour a cheque under the following conditions:

1. Insufficient Funds: If the account does not have enough balance.

2. Post-dated Cheque: If the cheque is presented before the mentioned date.

3. Stale Cheque: If the cheque is presented after the validity period (3 months in India).

4. Alterations: If there are overwriting or alterations without authentication by the drawer.

5. Signature Mismatch: If the drawer’s signature does not match the specimen.

6. Legal Restrictions: If the court orders, or if the account is frozen/attached.

7. Death or Insolvency of Drawer: If the banker is aware of the drawer’s death, insolvency, or insanity.

(e) Mention the advantages of e-banking services.
Answer: The major advantages of e-banking are:

1. Convenience: Customers can access banking services anytime, anywhere, without visiting the branch.

2. Time-Saving: Quick transactions like fund transfer, bill payment, and account inquiry.

3. 24×7 Availability: Services are available round the clock.

4. Cost-Effective: Reduces paperwork and transaction costs for both banks and customers.

5. Wide Range of Services: Facilities like online shopping payments, mobile recharge, ticket booking, etc. are available.

(f) Explain the benefits of online stock trading.
Answer: The benefits of online stock trading are:

1. Easy Access: Investors can trade from home or office through computers or mobile apps.

2. Faster Transactions: Orders are executed instantly with electronic systems.

3. Transparency: Investors can check live prices, market depth, and transaction history.

4. Lower Cost: Reduces brokerage charges compared to traditional methods.

5. Better Control: Investors can monitor portfolios and take decisions quickly without depending fully on brokers.

(g) Narrate the methods of qualitative or selective credit control.
Answer: The qualitative (selective) credit control methods used by RBI are:

1. Credit Rationing: Restricting credit for certain purposes or industries.

2. Margin Requirements: Changing the margin money on loans against securities to control credit flow.

3. Regulation of Consumer Credit: Fixing terms and conditions of consumer loans to control demand.

4. Direct Action: Punishing banks that do not follow RBI guidelines.

5. Moral Suasion: Persuading banks to restrict lending in non-priority or speculative areas.

(h) Write the defects of the Indian money market.
Answer: The main defects of the Indian money market are:

1. Lack of Integration: Rural and unorganized money markets are not well linked with the organized sector.

2. Shortage of Funds: Limited availability of loanable funds in comparison to demand.

3. Seasonal Fluctuations: Heavy demand for credit during agricultural seasons causes instability.

4. Existence of Unorganized Sector: Moneylenders and indigenous bankers still dominate in rural areas.

5. Lack of Proper Banking Facilities: Banking network is still weak in remote rural areas.

5. Answer any three from the following questions: 8x3=24

(a) What is the Central Bank? Discuss the traditional functions of RBI.
Answer: Central Bank is the apex monetary authority of a country that controls the supply of money and credit in the economy. It manages currency, regulates banks, and maintains financial stability. In India, the Reserve Bank of India (RBI) is the Central Bank.

Traditional functions of RBI:

1. Issue of Currency Notes – RBI has the sole authority to issue currency notes (except ₹1 notes and coins, which are issued by the Government of India).

2. Lender of Last Resort – Provides emergency finance to commercial banks during crises.

3. Regulation of Credit and Money Supply – Controls inflation and deflation by using monetary policy tools like CRR, SLR, Bank Rate, Repo, etc.

4. Foreign Exchange Management – Maintains exchange rate stability and manages India’s foreign reserves.

5. Control over Commercial Banks – Supervises and regulates all scheduled banks to ensure stability in the banking system.

6. Maintaining Financial Stability – Prevents financial panic and ensures smooth functioning of money and capital markets.

Conclusion: The RBI, as India’s central bank, plays a vital role in ensuring monetary stability, regulating banks, and maintaining the growth of the Indian economy.

(b) Discuss the role of NABARD in the development of the agricultural economy of India.
Answer: NABARD (National Bank for Agriculture and Rural Development) was established in 1982 to promote agriculture and rural development in India. It provides refinance, credit, and developmental support to agriculture and allied sectors.

Role of NABARD in Agricultural Development:

1. Credit Supply: Provides refinance to cooperative banks, RRBs, and commercial banks for agricultural loans.

2. Rural Infrastructure Development: Supports construction of irrigation systems, rural roads, storage facilities, etc. through the Rural Infrastructure Development Fund (RIDF).

3. Support to Farmers: Helps in modernization of farming, mechanization, and use of improved seeds and fertilizers.

4. Promotion of Rural Industries: Encourages small-scale industries, handicrafts, and rural entrepreneurship.

5. Financial Inclusion: Promotes microfinance, SHGs (Self-Help Groups), and women empowerment in rural areas.

6. Capacity Building: Provides training and research support to farmers and rural institutions.

7. Risk Management: Implements crop insurance and credit guarantee schemes to protect farmers.

8. Sustainable Agriculture: Promotes watershed management, afforestation, and climate-resilient farming.

Conclusion: NABARD plays a crucial role in improving the agricultural economy of India by ensuring financial support, infrastructure development, and farmer empowerment.

(c) What do you mean by stock broker? Write the functions of a stock broker.
Answer: A stock broker is a registered intermediary who buys and sells securities (shares, bonds, debentures) on behalf of investors in a stock exchange. They act as a link between investors and the stock market. In India, brokers must be registered with SEBI.

Functions of a Stock Broker:

1. Buying and Selling of Securities – Executes purchase and sale orders of clients.

2. Investment Advisory Services – Provides guidance on profitable investment options.

3. Research and Analysis – Supplies market information, price trends, and company performance.

4. Maintaining Client Accounts – Keeps records of securities and funds of clients.

5. Collection of Dividends and Interest – Helps investors receive dividends, interest, and bonus shares.

6. Risk Management – Advises on portfolio diversification to reduce risks.

7. Compliance with SEBI Regulations – Ensures fair trading practices and investor protection.

Conclusion: Stock brokers play a vital role in smooth functioning of stock exchanges by connecting investors with markets and providing professional investment services.

(d) What do you mean by lease financing? Explain the different forms of lease financing.
Answer: Lease financing is a financial arrangement in which the owner of an asset (lessor) allows another party (lessee) to use the asset for a specific period in return for periodic payments (lease rentals). It is a popular method of financing fixed assets like machinery, equipment, and vehicles.

Forms of Lease Financing:

1. Financial Lease:
   
   

• Long-term lease where the lessee bears maintenance, insurance, and risk of ownership.

• Practically transfers ownership rights to lessee for economic life of asset.

2. Operating Lease:
   
   

• Short-term lease, asset is returned to lessor after lease period.

• Lessor bears maintenance and risk.

3. Sale and Lease Back:
   
   

• Owner of an asset sells it to lessor and leases it back, continuing to use the asset.

• Provides immediate funds to the seller.

4. Leveraged Lease:
   
   

• Involves three parties – lessor, lessee, and financial institution.

• Lessor borrows funds to purchase asset and leases it to lessee.

5. Cross-Border Lease:
   
   

• Leasing arrangement between parties located in different countries.

Conclusion: Lease financing helps businesses acquire costly assets without large upfront investment, offering flexibility and tax advantages.

(e) What is a non-banking financial institution? Explain the characteristics of non-banking financial institutions.
Answer: A Non-Banking Financial Institution (NBFI) refers to financial institutions that provide banking-like services such as loans, investment, and credit facilities but do not hold a banking license and cannot accept demand deposits like banks. In India, NBFIs are regulated by the RBI under the RBI Act, 1934.

Characteristics of NBFIs:

1. No Demand Deposits: Cannot accept deposits payable on demand like savings/current accounts.

2. Credit Facilities: Provide loans, advances, hire purchase, leasing, and housing finance.

3. Specialized Services: Engage in investment, mutual funds, insurance, chit funds, etc.

4. Regulated by RBI: Must follow RBI norms and capital adequacy requirements.

5. Support to Banking Sector: Work as complementary to banks by providing financial services in unbanked sectors.

6. Mobilization of Savings: Attract funds from public through fixed deposits, bonds, debentures, etc.

7. Contribution to Development: Play a key role in infrastructure, housing, transport, and industrial finance.

Conclusion: NBFIs act as an important part of the Indian financial system by filling gaps left by traditional banks and ensuring wider financial inclusion.

❑❑❑❑❑

How This Question Paper Will Help You?

• Acts as a ready-made guide for exam preparation.

• Provides chapter-wise important questions.

• Useful for both last-minute revision and detailed practice.

• Can improve your overall performance in the AHSEC HS Final Exam.

Final Words

The ASSEB Class 12 Finance Solved Question Paper 2025 is an essential resource for students aiming to score well in their HS 2nd Year Commerce exams. Once you go through it, you will gain clarity about the question pattern and learn how to present answers effectively in exams.

Keep visiting The Treasure Notes for more AHSEC Class 12 Notes, Question Papers, Solutions, and Study Materials.