Question
Determine whether each of the following is direct financing or indirect financing.(2 points)
taking out a loan at a commercial bank
Direct Financing
Indirect Financing
selling stock on the stock market
Direct Financing
Indirect Financing
investing in a friend's new business
Direct Financing
Indirect Financing
investing in a mutual fund
Direct Financing
Indirect Financing
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taking out a loan at a commercial bank
Direct Financing
Indirect Financing
selling stock on the stock market
Direct Financing
Indirect Financing
investing in a friend's new business
Direct Financing
Indirect Financing
investing in a mutual fund
Direct Financing
Indirect Financing
Skip to navigation
Answers
GPT-4o mini
Here are the classifications for each of the financing options you provided:
1. **Taking out a loan at a commercial bank**
- **Indirect Financing**
(The bank acts as an intermediary between lenders and borrowers.)
2. **Selling stock on the stock market**
- **Direct Financing**
(The company raises capital directly from investors who buy shares.)
3. **Investing in a friend's new business**
- **Direct Financing**
(You are providing capital directly to your friend's business without any intermediary.)
4. **Investing in a mutual fund**
- **Indirect Financing**
(The mutual fund pools money from many investors and invests it in various securities, acting as an intermediary.)
1. **Taking out a loan at a commercial bank**
- **Indirect Financing**
(The bank acts as an intermediary between lenders and borrowers.)
2. **Selling stock on the stock market**
- **Direct Financing**
(The company raises capital directly from investors who buy shares.)
3. **Investing in a friend's new business**
- **Direct Financing**
(You are providing capital directly to your friend's business without any intermediary.)
4. **Investing in a mutual fund**
- **Indirect Financing**
(The mutual fund pools money from many investors and invests it in various securities, acting as an intermediary.)