Why did so many people invest in the stock market in the 1920s?a) they felt it was safer to invest in stocks then in bank deposits
b) they had faith in the stock market because it was well regulated
c) they believe the majority of stocks were undervalued at the time
d) they could buy stocks "on the margin," so they needed less initial capital

Answers

Answer 1

Answer:

The correct answer to the question is Option D) They could buy stocks "on the margin," so they needed less initial capital.

A lot of people invested in the stock market in the 1920s because they could buy stocks 'on the margin', and hence, required little initial capital.

'Buying on margin' means that you leverage an asset by borrowing money from a lender. This easy access to borrowing, fueled a growth in stock market investment, which eventually created a bubble and completely collapsed.

All this resulted in the worst US economic depression in recent history and the event is ingrained in the US socioeconomic history.

Answer 2

Answer:

Final answer:

Many people invested in the stock market in the 1920s primarily because they could buy stocks 'on the margin', needing less initial capital. Additionally, there was a widespread belief that stocks would continue to rise, creating an allure of 'easy money.' The correct option is d.

Explanation:

There were several reasons why many people decided to invest in the stock market during the 1920s. One chief reason was the ability to buy stocks 'on the margin.' This process meant that individuals could purchase stocks without needing the full amount upfront, thereby needing less initial capital.

Instead, they would borrow the remaining cost of the stock and repay it along with interest later. As a result, more people could partake in the stock market than before. Additionally, during the 1920s, most people thought that the value of stocks would continue to rise.

Hence, they saw investment in the stock market as an opportunity for significant financial gains. It wasn't necessarily because they thought stocks were undervalued, nor was it because the stock market was particularly well-regulated or safer than bank deposits.

The common thought was more along the lines of 'easy money' to be made, leading to an investment craze. The correct option is d.

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Answers

Answer:

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Explanation:

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Answers

Answer;
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Answers

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Answers

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