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12#
發表於 2008-10-8 07:03 PM
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i thought it is the reason of rate of return.
% a# n. @. Z5 C: ~CDs could have different ratings, AAA -> F,2 Q8 ^: R2 ?/ l4 C3 g( Y$ V
more risky ones would have higher premium (interest rate) as a compensation for an investment.- \/ J$ b( x6 x; Q( _
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
$ Q+ y1 y7 ~! U, c+ T* {in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
3 a- D4 j8 ~7 i* B2 }' Z, }Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
# p S) G8 g' G' F7 u, V) T/ N5 csimilar to bonds, CDs trading in the secondary market have different value at different times,' v' L7 d9 L2 A" u. m, C, G
normally the value is calculated by adding it's principle and interest.
+ ^7 u: w. u4 N# veg. the value of the mortgage+the interests to be recieved in the future. : ~. ]0 f; c: E1 j1 Y2 X: ?& x ~
banks who sell the CDs, could enjoy a few benefits like, the present value of cash and passing the risk of holding a debt to another party.- Y) A D0 k9 h5 x
) D2 X6 H9 N9 M6 H) C* q5 Q: y2 ~
im not quite sure if the multiplier effect does really matter in this case.
) u" ` t* [/ r5 a" Fin stock market, it's the demand and supply pushing the price up/downwards.
# k8 J0 }6 Y3 U! M/ cFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12," u8 n; r; m: g+ O' w
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.* h1 u. c. @; B' ]+ G( B5 P3 B
The capital loss that ppl suffer nowadays, i believe, most of them does not really suffer a real $ lost yet as long as they dont sell their securities. 5 s; Q2 ~- N' X
but the value of their assets did really drop significantly.) k3 s* R- v# f
$ M( h; e) l$ w
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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