Good advice in #2.

You'll have to take the information given in five of the texts that you've read to draw some conclusions about the characters.  In addition to dialogue and action, here are some other areas to consider for indirect characterization:

• reactions to other characters
• interaction with the environment
• body language or other gestures
• personal background (family, education, etc.)
• "the unsaid"--this one is sometimes overlooked because it calls on the reader to go against what the character has displayed.  For example, in Catcher in the Rye, Holden often says that he thinks people are phony, but he never applies this to himself even though after a while his character suggests that he sees negative aspects of his own character reflected in other people.

Indirect characterization is simply characterization accomplished by means other than the writer/narrator directly telling the reader what a character is like (characterizing the character, if you will).  If the narrator tells you something about a character, that's direct characterization.  If information about a character is revealed through dialogue or action, that is indirect characterization. 

This is easy, just skim through five books you've read.  I can't imagine a teacher assigned this assignment without your having read five books.  Also, are you sure it's "books" and not stories?  Five stories in your freshmen literature book would make more sense for an assignment. 

I'll give you one example.  When Jerry in Lessing's "Through the Tunnel" splashes and yells out greetings in a foreign language that make little sense, and he does this just to get the attention of the older boys because he feels left out, the reader realizes Jerry is immature.  The narrator doesn't tell us Jerry is immature, Jerry's actions and words show us.  That is indirect characterization.  I'll leave the rest to you.