Question

Which event best completes the table?

Answer 1

Answer:

C. Declines in stock prices eliminated personal savings and left investors in debt.

Explanation:

The biggest risk from buying on margin is that you can lose much more money than you initially invested. A loss of 50 percent or more from stocks bought on margin equates to a loss of 100 percent or more, plus interest and commissions.

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Answer 2

Answer:

Declines in stock prices eliminated personal savings and left investors in debt ( C )

Explanation:

Buying of stocks by investors "On Margin" means that investors could buy more stocks than they can actually afford at the moment. in this type of stock purchase the broker provides the investor the platform to buy the stocks beyond what they can afford by allowing the investor make a part payment for the stock, while the Broker makes up the remaining cost for the investor " buying on margin" by the Investor.

When the stock prices declines it places a huge loss on the investor that bought it on a margin than an investor that didn't buy on margin. this is because the investor will need to pay up the margin gradually and still bear the loss of the decline in stock prices.

A booming stock market encourages buying stock on margin by investors. but it is not an effect of it.