  We present host-galaxy velocity dispersions of 12 local (mainly
Palomar-Green) quasi-stellar objects (QSOs) measured directly from the stellar
CO absorption features in the H band. The mean bulge velocity dispersion of the
QSOs in our sample is 186 km/s with a standard deviation of 24 km/s. The
measurement of the stellar velocity dispersion in QSOs enables us to place them
on observational diagrams such as the local black-hole mass to
bulge-velocity-dispersion relation and the fundamental plane of early-type
galaxies. Concerning the former relation, these QSOs have higher black hole
masses than most Seyfert 1 AGNs with similar velocity dispersions. On the
fundamental plane, PG QSOs are located between the regions occupied by
moderate-mass and giant ellipticals. The QSO bulge and black hole masses,
computed from the stellar velocity dispersions, are of order 10^11 M_sun and
10^8 M_sun respectively. The Eddington efficiency of their black holes is on
average 0.25, assuming that all of the bolometric luminosity originates from
the active nucleus. Our data are consistent with other lines of evidence that
Palomar-Green QSOs are related to galaxy mergers with gas-rich components and
that they are formed in a manner similar to the most massive Ultraluminous
Infrared Galaxies, regardless of their far-infrared emission. However, PG QSOs
seem to have smaller host dispersions and different formation mechanisms than
QSOs with supermassive black holes of 5x10^8-10^9 M_sun that accrete at low
rates and reside in massive spheroids.
