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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. U1 A8 ^& kCDs could have different ratings, AAA -> F,
8 q9 l$ |: s/ t4 w* p0 Mmore risky ones would have higher premium (interest rate) as a compensation for an investment.: { w9 R* U1 y4 Y: Q) l
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
! z; A, a" I. a2 ~in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
( t w& G! p2 D' RAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
' A9 f! p0 E9 t9 y/ {similar to bonds, CDs trading in the secondary market have different value at different times,% W* V7 Y$ e( q' w. l
normally the value is calculated by adding it's principle and interest.
: l* t, i& v g5 P! g) N1 C- Yeg. the value of the mortgage+the interests to be recieved in the future. 2 Q4 f9 C4 B. T2 n& u& m( k+ d* {
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.
& U8 Z1 M) z. e- ?& t: o
) J! n1 d$ E$ Z" H# B6 p* A: Nim not quite sure if the multiplier effect does really matter in this case.% i9 h5 {# u/ Y8 s8 ^9 d8 [, N
in stock market, it's the demand and supply pushing the price up/downwards.
6 b" U: M& W$ y9 k1 V: Z5 aFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,3 e. ]9 ?9 X0 l; k. u6 K
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.9 C7 }/ }7 i9 \6 |
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.
& o3 I* y6 e6 P" R4 `, M4 Xbut the value of their assets did really drop significantly.
; s+ r; I: f# q# d, g# X8 L7 H2 a4 G! d' S
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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