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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.
; n d3 n- x4 N+ l' NCDs could have different ratings, AAA -> F,% n; e$ H W& D: n; ]( H# N
more risky ones would have higher premium (interest rate) as a compensation for an investment.
/ L& q6 j2 B6 F# |main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
6 T: {: ]7 W" P/ Zin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.+ N( K& f" I J; _# }& V, y$ T
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
# C1 D9 }& M6 L8 h# b$ H Z9 ?9 {similar to bonds, CDs trading in the secondary market have different value at different times,
; G y1 m( r7 S' {" @5 gnormally the value is calculated by adding it's principle and interest.
3 y8 p: J# G+ N, ^/ C! Neg. the value of the mortgage+the interests to be recieved in the future. 4 r* w# R6 f7 ~; A
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.
0 c% a; @' z* N* g" U2 d0 |. e* l* d# t- Z3 f7 l4 P7 X$ E7 W
im not quite sure if the multiplier effect does really matter in this case.
0 q# d7 j y. {! kin stock market, it's the demand and supply pushing the price up/downwards.! j0 y8 F2 d0 k; I
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
, O* u' F) l; U& Z" ~A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.- ^6 ^' h& h' _, N
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. - K3 U7 l" f! w: s0 v' [
but the value of their assets did really drop significantly.0 _$ v$ T Z, {
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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