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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.
6 X3 \! n7 N3 q1 \2 j8 ZCDs could have different ratings, AAA -> F,5 ?) \+ h; J0 O, I5 C6 {
more risky ones would have higher premium (interest rate) as a compensation for an investment." w" s0 B+ x- c9 _! t
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. E! n# r; k! E6 D7 X/ \in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
9 F( [% t- ~8 Q" F' t( L0 ?Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.7 ?9 g; u4 M' z; W( E
similar to bonds, CDs trading in the secondary market have different value at different times,
. G" z- u, ~% _( ~4 ynormally the value is calculated by adding it's principle and interest.
+ ]) O* T. n# v; v7 k, W2 E$ r m0 veg. the value of the mortgage+the interests to be recieved in the future.
# z: c; _- M; z2 H8 Z4 R( Jbanks 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.
1 s- b* y% T* c( U+ K
7 [# G- U% {1 G& \2 oim not quite sure if the multiplier effect does really matter in this case.
5 B1 X7 v& f) J- h. G( din stock market, it's the demand and supply pushing the price up/downwards.! ]9 [* K' ~/ @, U( }+ h
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
3 d2 n d. \2 T" Q2 EA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.5 ?; D5 z) c: C* U v* c2 U
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.
- W4 X: z6 }& u( V( |! R) cbut the value of their assets did really drop significantly.. w5 q* s3 b5 a
. Z5 X h( s/ H3 ~[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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