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snow_tiger [21]
3 years ago
7

Why did so many people invest in the stock market in the 1920s?

History
2 answers:
Archy [21]3 years ago
7 0
So many people invested most of their life savings in the stock market in the early 1920's because they could D. buy stocks "on the margin" (credit), so they needed less initial capital!
elixir [45]3 years ago
5 0

The correct answer to the question is Option D) They could buy stocks "on the margin," so they needed less initial capital.

A lot of people invested in the stock market in the 1920s because they could buy stocks 'on the margin', and hence, required little initial capital.

'Buying on margin' means that you leverage an asset by borrowing money from a lender. This easy access to borrowing, fueled a growth in stock market investment, which eventually created a bubble and completely collapsed.

All this resulted in the worst US economic depression in recent history and the event is ingrained in the US socioeconomic history.

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