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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.. B- P: c( d1 w% @3 C
CDs could have different ratings, AAA -> F,
9 E) M- l) U: Omore risky ones would have higher premium (interest rate) as a compensation for an investment.
/ D& c0 l9 f* \" w% ^7 b: xmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
) }( R# G- a6 X, X: p' N; w. ^in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.* }9 j. _) h+ R* t
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
6 S+ p' f7 Z" q; M( n9 jsimilar to bonds, CDs trading in the secondary market have different value at different times,6 C% Z& u A7 x4 j
normally the value is calculated by adding it's principle and interest. 4 [/ I# z# y9 A
eg. the value of the mortgage+the interests to be recieved in the future. * b2 g( }5 Z8 I6 ?: W+ v. d
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.! K" j, z2 ^: T3 s ~% }5 [
5 i) }6 p" f, x- J: Vim not quite sure if the multiplier effect does really matter in this case.
v0 a% V# v7 i% P9 ^in stock market, it's the demand and supply pushing the price up/downwards.
" P. F! d" B" f" h6 }4 t4 r" UFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,0 b, z" r! x# Y% v7 b
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
# I5 J2 `9 y9 Z% r0 x" N' m6 p+ AThe 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.
. d$ i0 E# D. {& R) Gbut the value of their assets did really drop significantly.- l. V! d) Y: r* S( _
* I) K7 R/ b: U9 Z' T! o[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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