Question

What was the danger of Americans buying stocks on margin?

They sold more stocks.
They bought stocks that were hot.
They avoided the risks of the market.
They went into debt to buy stocks.

Answer 1

Answer: They went into debt to buy stocks.

Explanation: I just took the quiz :)

Answer 2

B.They bought stocks that were hot.

Step-by-step explanation:

The biggest risk from buying on margin is that you can lose much more money than you initially invested. A decline of 50 percent or more from stocks that were half-funded using borrowed funds, equates to a loss of 100 percent or more in your portfolio, plus interest and commissions.