Multiple choice

Which of the following represent indirect investments?

  1. Investment in a mutual fund

  2. Investment in shares

  3. Investment in bank deposit

  4. Investment in post office schemes
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Indirect investments are those where you invest through an intermediary rather than directly in the underlying asset. Mutual funds are classic indirect investments - you invest in the fund, and professional fund managers use that money to buy a portfolio of securities. Direct investments would be buying shares, bank deposits, or post office schemes yourself, where you hold the asset directly.

Keep practicing — related questions