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VikaD [51]
3 years ago
13

Why was stocked bar on margin considered a risky investment

History
1 answer:
vitfil [10]3 years ago
6 0

<u>The right answer is:</u>  

A. Investors purchased the stocks with little cash down, if the price dropped the investor had to repay the loan.  

 

<u>Explanation: </u>

<em>Buying on margin is when you take out a loan to buy a stock, this process is also called leveraging your position, it basically means having a collateral.  </em>

<em> </em>

<em>When you buy on margin the stocks you buy are kept as collateral until you pay off the loan that makes them extremely risky.</em>

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