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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.! L. `: C/ y P: @6 k
CDs could have different ratings, AAA -> F,
! p% h0 r, N* K: |more risky ones would have higher premium (interest rate) as a compensation for an investment.
$ e) n" M/ z. E4 ^main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
8 K! u6 k; |( S0 g* L1 D, Tin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
# u o# A5 \' _8 b' M2 fAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
: z+ m$ J- t. t( A% A! @similar to bonds, CDs trading in the secondary market have different value at different times,
9 v) Q$ }; v) H' e y, wnormally the value is calculated by adding it's principle and interest. 0 O0 }9 c7 L) [8 L1 @
eg. the value of the mortgage+the interests to be recieved in the future.
. M# ]' z, L# `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.
8 G+ `' v1 [7 n) s1 B* t( W% d/ P3 _7 a4 T: M( }
im not quite sure if the multiplier effect does really matter in this case.8 N- `, v, T# Y# y, g4 P* ~
in stock market, it's the demand and supply pushing the price up/downwards.
# M* M, _9 ?% g. S( @ X* t7 dFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,! Q( l8 t7 a: S6 ]0 d
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction. a+ f2 ?+ f6 c! v1 ~
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.
& L( _1 E' ]( J, f% h8 s8 X: P$ tbut the value of their assets did really drop significantly.
) q5 E$ [) J. p5 J' }
& J$ j+ f0 {2 W[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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