Question

Investment Bank: Definitions and The differences for another banks;

What is a Bank?

Discount Commercial Notes (Bank): What is?

Answer 1

Ans.1.Investment Bank: Investment Bank is a bank in which it acts as a intermediary in financial transactions. It guides and support the new startups for establishment of business. it also advise its customers to invest in various financial instruments like bonds, stocks etc. It also take charges from its customers for its services. They plays a critical role in various activities like research and development, corporate restructuring, mergers and acquisitions etc.

Different from other banks:

Investment bank focus on dealing with transactions of financial instruments for corporates and other organisations. On the other hand, Other banks is focusing on accepting deposits from the public and lending them to industries in the form of short or long-term loans.

Bank: Bank is an financial institution in which accept deposits and lend it in the form of loans.Banks also financial services like Currency management, insurance services,etc

Discount Commercial Notes : It is a short term financial instruments issued by a company in which is issued at a discount and redeemable at face value.

For Example: A PQR company has issued a Discount Commercial Notes having maturity value of Rs. 4,00,000. The investor pays 3,85,000. at the time of investment. On maturity, The company pays Rs 4,00,000. It is said to be issued at a discount of $4,00,000-$3,85.000 = $15,000. This constitutes the interest of the invester.