Question

In the 1920s, the danger of buying stock on credit was that if the stock dropped, borrowers

Answer 1

The correct answer is A) could not repay loans used to buy the stock.

In the 1920s, the danger of buying stock on credit was that if the stock dropped, borrowers could not repay loans used to buy the stock.

People bought the stock with the current value of that time. Pepple had tp cover the loan if the value of the stock increased. When the value falls, people had to make up the difference. That was the danger to buy stock on credit because they loaned people the money and had to be repaid.

Answer 2

Could not repay loans used to buy the stock