0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
1920 buying on credit was called buying on?
Buying on Margin
What did buying stock on margin mean in the 1920's?
"Buying on Margin" meant that you would only have to put down a small percentage of money (10%) and the broker would cover the rest. If the stock price dropped too low the broker could issue a "Margin Call" which means that the person has to repay all of the money that the broker put down. People often used this in the 1920s in order to buy more stock for less. i.e. Instead of buying 5 stock for $10, he could buy 50 stock for $10 and a loan from the broker. If you were to sell the stock, the broker would get his money back plus a portion of the profits.
What would 10000 dollars in 1920 be worth today?
$10,000.00 in 1920 had the same buying power as $121,482.01 in 2013. Annual inflation over this period was 2.72%. Source: http://www.dollartimes.com/calculators/inflation.htm
Was stock a name given to a bank account during the 1920's?
yes
What is it called when stock is bought for a fraction of its cost and then resold for a profit without the full purchase price never having been paid?
This process is called purchasing on margin. This is actually one of the leading causes of the stock market crash in the 1920's, when the margins were called and they were unable to be paid.
1920 buying on credit was called buying on?
Buying on Margin
What was buying on margin in 1920's?
"Buying on Margin" meant that you would only have to put down a small percentage of money (10%) and the broker would cover the rest.
Toward the end of the 1920's what was the main goal of the Federal Reserve's policies with regard to buying on margin?
to make it more difficult and more expensive to offer margin loans to investors.
Which of these terms best describe buying on margin during the 1920's?
paying ten cents on the dollar for stock paying ten cents on the dollar for stock paying ten cents on the dollar for stock paying ten cents on a dollar of stock
What were two signs of weakness in the 1920 us economy?
Two signs of weakness in the economy in the 1920's was that many people were buying on margin which means buying with loans, if people able to pay back the loan the would loose also buying with credit.
Why did buying stocks on margin in the 1920's not only cripple the stock market but investors as well?
The question of whether buying stocks on margin eventually leads to severe market pullbacks has been the subject of intensive debate. Bull markets are typically associated with rising margin debt as Investors buy stocks on margin to leverage gains through the use of debt. The increased stock buying permitted by margin debt contributes to the strength and longevity of a bull market but this reverses during market pullbacks if investors receive margin calls and are forced to liquidate stocks. Margin buying by itself is not a dangerous practice and there have been prolonged periods during which margin debt remained at high levels and the stock market continued higher. The problem associated with margin debt is that a sudden adverse macro economic event that panics investors into selling causes prices to drop which can put margin buyers into a negative equity position. At this point the forced liquidation of stocks due to margin calls that cannot be met results in a self perpetuating event whereby lower prices force more selling which in turn causes further price declines. It can therefore be argued that margin debt per se does not cause a market selloff but can result in a steeper price decline than would have occurred if margin debt did not need to be liquidated.
Which best describes the presidential leadership in economic matters during the 1920?
Presidents were actively "pro-business."
Which best describes the presidential leadership in economic matters during the 1920's?
Presidents were actively "pro-business."
In the 1920's many American consumers began to adopt the practice of buying goods on credit?
buying on credit was the "item" that lead to the great depression. * people started buying luxury items * people borrowed money to invest in stocks * thought they could repay the loan when they sold their stocl or profit * b/c of so much buying; people were making ALOT of money * stores sold LOTS of goods; that made value of stock rise * at some pojnt; people could no longer buy things b/c they had spent all their money into paying off their credit * inflamation started; that lead && started the great depression
What did buying stock on margin mean in the 1920's?
"Buying on Margin" meant that you would only have to put down a small percentage of money (10%) and the broker would cover the rest. If the stock price dropped too low the broker could issue a "Margin Call" which means that the person has to repay all of the money that the broker put down. People often used this in the 1920s in order to buy more stock for less. i.e. Instead of buying 5 stock for $10, he could buy 50 stock for $10 and a loan from the broker. If you were to sell the stock, the broker would get his money back plus a portion of the profits.
What word describes American economy in 1920?
fluctuating
How much is 300.00 back in 1920 worth in present?
$300.00 in 1920 had the same buying power as $3,754.37 in 2016.
