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In the late 1920s which methods allowed investors to purchase stock at a fraction of its price and borrow the rest from the brokerage firm?

In the late 1920s, investors used a method called "buying on margin" to purchase stocks. This involved paying a fraction of the stock's price upfront, typically 10-50%, while borrowing the remaining amount from a brokerage firm. This practice amplified potential profits but also increased risks, contributing to the stock market crash of 1929 when many investors could not repay their loans.


What is ShareBuilder?

ShareBuilder was an online brokerage service that allowed users to invest in stocks and exchange-traded funds (ETFs) with a focus on dollar-cost averaging. It enabled investors to set up automatic investments at regular intervals, making it easier to build a portfolio over time. The service was known for its user-friendly platform and educational resources tailored for novice investors. ShareBuilder was acquired by Capital One in 2010 and later transitioned into Capital One Investing before being discontinued in 2018.


The formation of joint-stock companies allowed private investors to?

Share the risks and profits of an undertaking. Just a guess, though.


How did buying stock on margin increase the bull market?

Buying stock on margin allowed investors to purchase more shares than they could with their available cash, effectively amplifying their potential gains. This practice led to increased demand for stocks, driving prices higher and contributing to the overall optimism of the bull market. As prices rose, more investors were encouraged to enter the market, further fueling the bullish trend. However, this also increased risk, as a market downturn could lead to significant losses for those using margin.


Define hedge fund?

Hedge fund is an investment fund for a limited range of investors allowed by regulators to undertake a wider range of investment and trading activities than any other investment funds.

Related Questions

In the late 1920s which methods allowed investors to purchase stock at a fraction of its price and borrow the rest from the brokerage firm?

In the late 1920s, investors used a method called "buying on margin" to purchase stocks. This involved paying a fraction of the stock's price upfront, typically 10-50%, while borrowing the remaining amount from a brokerage firm. This practice amplified potential profits but also increased risks, contributing to the stock market crash of 1929 when many investors could not repay their loans.


How did buying on margin allow more people to invest in the stock market?

Buying on margin allowed more people to invest in the stock market by enabling them to borrow money to purchase stocks. With a margin account, investors could put down only a fraction of the total cost of the shares they wanted to buy, typically around 10%, and borrow the rest from a broker. This allowed individuals with limited capital to have greater purchasing power and participate in the stock market.


The foreign institutional investors were first allowed to invest in India in the year?

sept 1992


Why were joint stock companies important to capitalism?

They allowed investors to take fewer risks.


What did the Twenty-first Amendment allow US citizens to do?

it allowed them to manufacture, purchase, and consume alcohol.


What is ShareBuilder?

ShareBuilder was an online brokerage service that allowed users to invest in stocks and exchange-traded funds (ETFs) with a focus on dollar-cost averaging. It enabled investors to set up automatic investments at regular intervals, making it easier to build a portfolio over time. The service was known for its user-friendly platform and educational resources tailored for novice investors. ShareBuilder was acquired by Capital One in 2010 and later transitioned into Capital One Investing before being discontinued in 2018.


What types of investments are allowed in a brokerage account?

A traditional brokerage account will provide the user with a variety of research sources in addition to allowing the individual to purchase and trade stocks, bonds, and mutual funds. The stock broker who sets up your account and executes the trades in your name will usually charge a set fee per trade or will work on a commission basis.


What purchase allowed the US to have a direct railroad line across the southern territory?

The Gadsden Purchase.


The formation of joint-stock companies allowed private investors to?

Share the risks and profits of an undertaking. Just a guess, though.


How do you change a fraction when the numerator is 0?

You can't change a fraction when the numerator is zero because no matter what the denominator is the fraction is still zero. A zero denominator is not allowed because you cannot divide by zero.


What was true about President Jefferson's decision to buy the Louisiana Territory?

He was unsure if the purchase was allowed by the constitution.


The Adams-Onis Treaty allowed the US to purchase Florida from who?

Spain