Question

During the 1920s, people would buy stock on margin, which meant that they

Answer 1

In the 1920s, people invested in the stock market more than they ever did before. Prices rose very fast so that by the end of the 1920s, traders could become rich from buying and selling overnight. They bought stock on margin which meant that they could hold the stock for as little as a 10% downpayment. They then waited for the stock price to rise and then they sold it. During 1928 and 1929, the stock of many companies was valued more than what the companies were valued for.