Why was stock bought on margin considered a risky investment? Investors purchased the stocks with little cash down; if the price dropped the investor had to repay the loan. Stocks purchased on margin were often for companies that had little or no value. Investors paid high interest rates to buy these stocks; they needed a substantial return to make money. If the value of the stock declined, brokerages were responsible for the loss.

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Efrain

26 December, 20:59

Why was stock bought on margin considered a risky investment? Investors purchased the stocks with little cash down; if the price dropped the investor had to repay the loan. Stocks purchased on margin were often for companies that had little or no value. Investors paid high interest rates to buy these stocks; they needed a substantial return to make money. If the value of the stock declined, brokerages were responsible for the loss.

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Dario Shelton · Answer 1

One of the reasons why stock bought on margin is considered a risky investment is because "Investors purchased the stocks with little cash down," meaning that they had to borrow the remained of the money.

Kamron Mcfarland · Answer 2

the answer is A i just took the test