Better Students Ask More Questions.
What is the term for a demand that the investor pay the loan at once?Like at the start...
1 Answer | add yours
I believe the term that you are asking about is "margin call."
During the late 1920s, there was a lot of what was called "buying on the margin." This was when an investor would borrow the majority (usually around 90% in those days) of the price of a stock that the investor wanted to buy. The investor would pay off the loan when the price of the stock rose.
After the crash of October 1929, the prices of stocks stopped rising. The lenders who had lent the money to the margin buyers wanted that money back. At that point, they issued what are known as "margin calls" demanding that the money they loaned should be paid back.
Posted by pohnpei397 on April 16, 2011 at 12:12 AM (Answer #1)
Related QuestionsSee all »
Join to answer this question
Join a community of thousands of dedicated teachers and students.