Question

Why was stock bought on margin considered a risky investment??

A) investors purchased the stock with little cash down; if the price dropped the investor had to repay
B) stocks purchased on margin were often for companies that had little or no value.
C) investors paid high interest rates to buy these stocks; they needed a substantial return to make money.
D) if the value of the stock declined, brokerages were responsible for the loss.

Answer 1

Answer: A) investors purchased the stock with little cash down; if the price dropped the investor had to repay

Step-by-step explanation:

Answer 2

The answer would be a) investors purchased the stock with little cash down; if the price dropped the investor had to repay.