THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Abusing the American Stock Exchange system
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Making a safe stock purchase with little risks
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buying stocks with money borrowed from banks or credit.
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Buying margarin instead of butter.
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Detailed explanation-1: -Buying on margin is borrowing money from a broker in order to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you’d be able to normally. To trade on margin, you need a margin account.
Detailed explanation-2: -For example, if you have $5, 000 cash in a margin-approved brokerage account, you could buy up to $10, 000 worth of marginable stock: You would use your cash to buy the first $5, 000 worth, and your brokerage firm would lend you another $5, 000 for the rest, with the marginable stock you purchased serving as collateral.
Detailed explanation-3: -What is buying on margin? An investor can buy securities using money borrowed from a brokerage firm (rather than paying for the securities in full). This is known as “buying on margin.” Buying on margin requires opening a margin account and depositing an initial amount of purchased securities.