USA HISTORY

Detailed explanation-1: -Throughout the 1920s a long boom took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value. Many investors became convinced that stocks were a sure thing and borrowed heavily to invest more money in the market.

Detailed explanation-2: -Stock Market One reason for the boom was because of financial innovations. Stockbrokers began allowing customers to buy stocks “on margin.” Investors only needed to put down 10-20% of the price of a stock and brokers would lend them the remaining 80-90%.

Detailed explanation-3: -During the late 1920s, the stock market in the United States boomed. Millions of Americans began to purchase stock, causing the market to dramatically increase in value. Unfortunately for the economy, so many Americans invested money in the stock market that stocks became inflated in price.

Detailed explanation-4: -What was the character of the stock market in the late 1920s, and what caused it to crash? It was a bull market that crashed because stocks were overvalued and many people had purchased stocks on margin.