<p>Which of the following is likely to be most effective in minimizing the damage caused by a stock market crash?
a) restrictions on short selling
b) limitations on borrowing against securities
c) tax on short term capital gains
d) improvements in the market's computer systems</p>
<p>I say B. Limitations on borrowing… people cannot then end up owing more than they have already spent on their investments. </p>
<p>Todays problems, along with the crash of 29 were exasperated(?) by the leveraging and borrowing against stocks I believe… so I say B…</p>
<p>The answer could be different if c said ELIMINATE tax. I say B</p>
<p>this is a practice exam question. the answer is actually D. but i have absolutely no idea why, and it seemed like a typo, but i can’t be sure. i thought the answer was A, so that if there’s a limit to short-selling, prices won’t dip as quickly and as drastically.</p>
<p>Yes/no?</p>