Notes
- Borrowing money to buy stock in the hope that it will go up and you can repay the loan and collect the difference
- Led to stock market crash
Summary
Buying on Margin is borrowing money from banks in order to buy stock, and once stock raises in price, you could sell it, and repay the bank, and keep the difference. However, the stocks never went up in price at this time, and it led the banks to going out of business; as a result, the Great Depression.
Quotes
"In the 1920's you could buy stocks on margin. You could put 10 percent down, and borrow the rest against your stocks" - Ron Chernow
Subjunctive Questions
Could of the Great Depression been avoided if the stocks didn't fall? Or if not, would of there been another Historical USA coarse?