Question

One way investors and buyers made a great deal of money was by buying stocks "on themargin". What does this mean? a.Buyers pool their money and research the best stocks and buy them. b.Buying stock low and selling high. c.Borrowing money to buy stocks.

Answer 1

c.Borrowing money to buy stocks.

Step-by-step explanation:

Given that margin comes from the marginal or additional unit. Hence, buying stocks on the margin means "Borrowing money to buy stocks."

The borrowing is from a broker which allows a buyer to buy more than he normally purchases. Buying on the margin is believed to have greater risk ad comes with higher potential returns.

Hence, in this case, the correct answer is "Borrowing money to buy stocks.'