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megy143
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Why did so many people invest in the stock market in the 1920s?

AThey felt it was safer to invest in stocks than in bank deposits.
BThey had faith in the stock market because it was well regulated.
CThey believed the majority of stocks were undervalued at that time.
DThey could buy stocks "on the margin," so they needed less initial capital.

Verified Answer :

The answer to your question is D

D is your answer .

Explanation: As the market rose through the 1920s, stockbrokers allowed investors to buy "on the margin," that is, by making only a small down payment, often as low as 10 percent. Easy availability of credit lured many investors to make quick profits on borrowed money. This credit expansion created a speculative bubble that inflated stock prices to unrealistic highs. The bubble burst in October 1929 when the British raised their interest rates to attract capital invested in the US market. As stock prices started falling, many investors who had bought on credit failed to repay, so brokers sold stocks held as collateral. This chain reaction led the market into a downward spiral.