what do you remember about the practice of buying on margin in the stock market before the crash of 1929…

what do you remember about the practice of buying on margin in the stock market before the crash of 1929? select all that apply. it contributed to inflated stock prices investors borrowed money to buy stocks it increased the risk of financial loss it led to government regulation of the stock market it involved buying stocks with cash

what do you remember about the practice of buying on margin in the stock market before the crash of 1929? select all that apply. it contributed to inflated stock prices investors borrowed money to buy stocks it increased the risk of financial loss it led to government regulation of the stock market it involved buying stocks with cash

Answer

Brief Explanations:

Buying on margin means investors borrow money to buy stocks. This practice contributed to inflated stock - prices as more money was chasing stocks. It also increased the risk of financial loss since if stock prices fell, investors still owed the borrowed money. After the 1929 crash, it led to government regulation of the stock market to prevent similar situations. Buying on margin does not involve buying stocks with cash.

Answer:

  • It contributed to inflated stock prices
  • Investors borrowed money to buy stocks
  • It increased the risk of financial loss
  • It led to government regulation of the stock market