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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.# y7 w" P8 c( S8 J2 F
CDs could have different ratings, AAA -> F,3 g. D; U, F$ \& \
more risky ones would have higher premium (interest rate) as a compensation for an investment.' K. N1 @% R7 k3 Y$ M* Z
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,% f- J9 ~3 a5 _- ? p1 _
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
7 V, x# s# ~ w$ j u; F- YAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.+ A" Q+ V7 \; r
similar to bonds, CDs trading in the secondary market have different value at different times,
6 |- R( M2 m# z* h% r6 E8 d+ _% ynormally the value is calculated by adding it's principle and interest.
+ z' m/ y7 d) C: S" e, S; leg. the value of the mortgage+the interests to be recieved in the future. / W. [7 \; }( v
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.4 A: D! K/ k8 ~( u; @( B0 t; R
4 h0 Q$ V! U# h2 Xim not quite sure if the multiplier effect does really matter in this case., C# ]5 a B& x" c: v0 H; J
in stock market, it's the demand and supply pushing the price up/downwards.
% M- ^9 E3 ^; E- z' |+ }5 ^For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
% _) v2 C1 @7 {; ~, d3 MA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
( B9 }$ s8 ~ F- eThe 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. ) n" S! y0 \ _8 g( C+ d( z! J
but the value of their assets did really drop significantly.# q4 @1 H' s; s# \/ ]) w% M# F w
5 V$ t# k# M: x$ O* Y[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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