Question

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.

Answer 1

a

Answer 2

thank you :)