Question

What happened on Black Thursday that sent everyone into a panic?

Answer 1

Actually the answer D.) Investors sold off vast amounts of their stock. Is the right one:)

Answer 2

Correct answer:

D. Investors sold off vast amounts of their stocks.

Explanation:

There was much speculative buying on the stock market in "the Roaring '20s," as the decade was known.  In the 1920s, people were so eager to invest and earn profits through the stock market that they bought stocks "on margin."  In other words, they paid for only a marginal percentage of the stocks with their own funds, and borrowed bank funds for the rest of the purchase.  That meant the banks were complicit in this arrangement too, by allowing those sorts of loans. By the late 1920s, 90% of the purchase price of stocks was being made with borrowed money.  This inflated the market in a way that spiraled out of control, and in 1929 that bubble burst.  When the market began to experience problems, investors sought to sell off their stocks as quickly as they could, the Black Thursday crash became worse and worse.