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Business, 04.02.2020 00:56 garrettrhoad

Why was stock bought on margin considered a risky investment?

a: investors purchased the stocks with little cash down; if the price dropped the investor had to repay the loan.
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.

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Why was stock bought on margin considered a risky investment?

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