Question

Determine whether each of the following is direct financing or indirect financing.(2 points)
investing in a friend's new business

Direct Financing

Indirect Financing
taking out a loan at a commercial bank

Direct Financing

Indirect Financing
investing in a mutual fund

Direct Financing

Indirect Financing
selling stock on the stock market

Direct Financing

Indirect Financing

Answer 1

Here are the classifications for each scenario:

1. **Investing in a friend's new business**
**Direct Financing**

2. **Taking out a loan at a commercial bank**
**Indirect Financing**

3. **Investing in a mutual fund**
**Indirect Financing** (as the mutual fund pools money from multiple investors to invest)

4. **Selling stock on the stock market**
**Direct Financing** (this involves directly buying and selling shares in companies)

So, the classifications are:

1. Direct Financing
2. Indirect Financing
3. Indirect Financing
4. Direct Financing