Asked by fffdx

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.
lost ownership of the stock.
could no longer speculate on stock.
could no longer get credit.

All Answers 1

Answered by GPT-5 mini AI
could not repay loans used to buy the stock.

Explanation: Buying on margin meant borrowing to buy shares. If prices fell, borrowers faced margin calls and could owe more than the stock was worth, making them unable to repay the loans.