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發表於 2008-10-8 07:03 PM
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i thought it is the reason of rate of return.
& d, K7 ?- Z5 ^+ \3 V, t% q) \- sCDs could have different ratings, AAA -> F,
# r6 o; |, `9 z% `; O- B, y2 Mmore risky ones would have higher premium (interest rate) as a compensation for an investment.
- V, P6 G+ I- @- g2 ^" z9 omain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. u0 d" l" B0 }1 R( Hin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.' Q6 T5 V& G0 M( j, c/ E( j, b# K
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
9 Z2 c3 p0 M3 b* E) \, F' @similar to bonds, CDs trading in the secondary market have different value at different times,9 D( \+ K) m; w% n8 K/ l( g* N
normally the value is calculated by adding it's principle and interest. 8 s3 c1 Q; X" _0 S: ]5 p) k1 V: \
eg. the value of the mortgage+the interests to be recieved in the future. % c1 |$ b0 k4 [! @0 l R& W: y
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.$ _ n( w' e3 {1 E, t. ~; D4 q! ^
. S; F, p7 H% R: K$ ^& P! B( z
im not quite sure if the multiplier effect does really matter in this case.
. e- ]( {5 U+ B$ n5 iin stock market, it's the demand and supply pushing the price up/downwards.
2 T# B$ Y' U2 T) jFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
7 P4 \. U6 y+ K- {. ]A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.& o. }& ?* {" M( ~# c! E
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.
4 g; I7 t7 V! M0 B( Ebut the value of their assets did really drop significantly./ H6 J- _+ \. {1 C1 o
1 a; [) i5 V, Y+ P- y% I[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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