Question

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

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

Explanation:

Buying stocks on margin means borrowing money (usually from a broker) to purchase stocks. So the danger is that individuals go into debt to buy those stocks. Let's analyze each option:

• "They sold more stocks" is not a danger of buying on margin; selling more stocks isn't related to the margin - buying process's risk.
• "They bought stocks that were hot" - buying "hot" stocks is a separate investment choice, not a direct danger of margin buying.
• "They avoided the risks of the market" is incorrect because margin buying actually increases market risks, not avoids them.
• "They went into debt to buy stocks" correctly identifies the danger as margin buying involves borrowing (taking on debt) to purchase stocks.

Answer:

B. They went into debt to buy stocks.