Which presented a problem in the stock market during the late 1920s?

A) buying on margin

B) buying on credit

C) buying automobile stock

D) day trading

The correct answer is A) Buying on margin.

Buying on margin was a common way in which individuals bought stocks during the 1920s. Citizens had the chance to buy a stock by putting 10% down and borrowing the the 90% from a bank. This caused a huge problem, as when the stock market crashed the people who borrowed money from the banks didn’t have the means to pay the bank back for the loan.