Question

1. What are margins and broker's role with them?

2. what did the banks do to try to stop the market collapse and what happened?

Answer 1

1.Margin in stock market refers to the process of trading where the Investors buy more stocks when they can afford.

It involves buying and selling of securities in one single session.

• Margin account provides resources to buy more quantities of stock.
• For this purpose a broker would lend the money to buy shares and keep them as collateral.
• Once the account is opened we are supposed to pay an initial margin which is also determined by the broker.

2. To stop the market collapse,on october 24th 1929 .,few bankers attempted to boil out the banking system with their own money but they were un successful.

Their move led to slight increase in stock price on october 26th .

But many investors lost their faith in the stocks and decided to sell their shares.