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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.
/ d0 ?( E- w' Q$ d" ICDs could have different ratings, AAA -> F,; P, S+ r5 L( b( u, U9 B
more risky ones would have higher premium (interest rate) as a compensation for an investment.) G& B" {* {. w L
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,; G; t4 A2 P9 o& W7 r2 C/ L# K0 ?
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.& k: w) ]8 u$ V7 p* @
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency. [1 n4 I6 t+ I0 g- i1 |' p
similar to bonds, CDs trading in the secondary market have different value at different times,
- ^1 K7 E' z7 s# k% z: y! f8 p( hnormally the value is calculated by adding it's principle and interest.
! K) O6 d1 s/ G, I# Ceg. the value of the mortgage+the interests to be recieved in the future.
. t% q% |- c2 Cbanks 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.
+ x' P9 y& l6 p8 Z9 G" G; g3 `2 b
: O R7 e4 ~' }& V$ n8 Z+ \im not quite sure if the multiplier effect does really matter in this case.7 Z4 G1 h! l, q7 l3 B# U
in stock market, it's the demand and supply pushing the price up/downwards.5 ]( X5 }3 {; U/ z: d- r* i
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,/ ^& s( G/ R7 ?% [
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
7 B. V9 i+ V2 E1 TThe 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.
' k: s1 U5 e' k$ Rbut the value of their assets did really drop significantly.
2 S4 [3 l4 _+ _- n) r' H( A s* T! D6 \/ U3 v7 m
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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