Question

1. what was the danger of americans buying stocks on margin?

they avoided the risks of the market.
they sold more stocks.
they bought stocks that were hot.
they went into debt to buy stocks.

Explanation:

Define buying on margin

Using the Stock Market Speculation knowledge point
Buying on margin means borrowing money from a broker to purchase stock, allowing investors to buy more shares than they could with their own cash.

Identify the primary danger

This practice meant investors went into significant debt, risking massive financial loss if stock prices fell.

Answer:

• They avoided the risks of the market.
• They sold more stocks.
• They bought stocks that were hot.
• They went into debt to buy stocks. (Correct answer)