How Does a Stock Market Crash Happen?
Prices fall when more people want to sell than buy at the current price.
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1.What is a stock market crash?
Prices fall when more people want to sell than buy at the current price.
2.What does buying on margin mean?
In 1929, buyers typically put down 10 percent and borrowed the rest, with the shares as collateral (Federal Reserve History).
3.Marge bought 1,000 of shares with 900 borrowed. The price falls 10 percent. What is left of her own money?
The shares fall to 900, the loan is still 900, and 900 minus 900 is zero; a fall of 5 percent would have left 50.
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