Why was stock bought on margin considered a risky investment? investors purchased the stocks with little cash down; if the price dropped the investor had to repay the loan. stocks purchased on margin were often for companies that had little or no value. investors paid high interest rates to buy these stocks; they needed a substantial return to make money. if the value of the stock declined, brokerages were responsible for the loss.

the correct answer is “opportunity cost”. opportunity cost is what a company misses out because it decided in one option over another one. in this case, the company decided to invest in building a factory so it gave up another possible benefit or profit in order to achieve success with the factory.  

trade-off is not the correct answer since it is a situation in which you accept losing something in return for benefits in other areas.

and finally, consequence is a general term used to accept what it comes when you make a decision. it can be a positive or negative consequence depending if the decision you took was the correct one.