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strojnjashka [21]
3 years ago
9

How did the Versailles Treaty lead to World War Two?

History
1 answer:
Fofino [41]3 years ago
3 0
They forced Germany to admit all guilt for the war and they required Germany to pay a large amount of money in reparations to the Allies. After WWI, Germans were very upset about the terms of the Treaty of Versailles. ... Of course, it was Hitler's rise to power that brought WWII about
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In financial terms, margin in an instrument which consists on depositing a collateral with a counterparty (generally the broker) to cover some of the credit risk that the depositor places to that counterparty.

In the 1920s, the mandatory requirements regarding margins were not very strict, and brokers asked investors to put in a small fraction of their own money. Leverage rates  which measure the proportion of debt, reached 90% with a high frequency.  Nowadays, the Federal Reserve has established the limit of 50%.

Back in 1929, when the stock market started to contract, many investors received margin calls. They had to hand in more money to their brokers, because the amounts required before were not enough and if not, their shares would be sold. Many people did not have the extra margin amounts required, their shares were sold and the market declined further. This generated more margin calls and more declines. This is why margin calls were one of the causes which triggered the Stock Market Crisis and, in turn, the Great Depression in 1929.

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