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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.
- }" f& _4 G3 e: s) X V' mCDs could have different ratings, AAA -> F,
% e9 v# B# v A v& s3 I; b6 @$ l, M4 ~more risky ones would have higher premium (interest rate) as a compensation for an investment.
_% l# {( m0 m& g- @" m+ u0 lmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,- Q: Q I `4 q* `
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
3 ?# C- |! S( Z$ qAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.& u/ p5 R2 j- K) U
similar to bonds, CDs trading in the secondary market have different value at different times,
& B! ^* p# X' ]; l: M) Nnormally the value is calculated by adding it's principle and interest.
+ r' J& g6 P+ ], e3 c% @9 J3 peg. the value of the mortgage+the interests to be recieved in the future.
0 a' E: y9 X0 o0 C, r$ @+ Zbanks 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.6 i2 D+ a& P" G( m% O6 [7 E: j
* [6 g& O$ j6 E) Q1 b. gim not quite sure if the multiplier effect does really matter in this case.
" I C+ C/ n+ \' ~8 ]# |( J# P4 E. ain stock market, it's the demand and supply pushing the price up/downwards.' M- t' G: \* b
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,. M g5 ?, `6 o* E( z1 D
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.5 J9 V+ O+ k: }9 M, Z$ @3 g# c
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. ' u* y& @# q2 [5 J
but the value of their assets did really drop significantly.2 U6 ?# E O9 F" z$ X
2 @4 ^' E" ~* c% p: e( g0 S! m
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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