A financial company that provides loan and invest in shares received ₹50,000 as interest on the loan at the year-end. Where will the amount of interest be shown in the company's cash flow statement?

Operating activity

The correct answer is option 1- Operating activity.

Company is engaged in the business of providing loans and also investing in shares. Any income arising from these activities should be shown under operating activity. So, interest received on loan is an operating activity for a financing company. For a non financing company, it is an investing activity.