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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.
1 e( b( ^3 p' c4 S( c. ^, SCDs could have different ratings, AAA -> F,
8 }1 a- z; j$ ^5 X( ?& G8 c7 O7 \more risky ones would have higher premium (interest rate) as a compensation for an investment.
9 D/ X: J3 c z: \8 ~main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
! E3 ]$ a- y: K8 a/ Win other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
9 u# l; c% I; c# h. j8 rAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.2 K* r0 V1 v) c) W
similar to bonds, CDs trading in the secondary market have different value at different times,* n. K0 ?- H$ Y. `" V J
normally the value is calculated by adding it's principle and interest. : H2 p. K7 t. i C! g. l, Y
eg. the value of the mortgage+the interests to be recieved in the future. - O; p, K* U$ t
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.) X0 V: o& s4 X5 z9 p: a" i2 ]5 k
* k. `5 t3 Q! Q1 vim not quite sure if the multiplier effect does really matter in this case.
/ _. K J% _ ]; \4 s% a: [in stock market, it's the demand and supply pushing the price up/downwards.- @2 O" u: T: A3 p/ \/ d* q. a
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
" s1 ?7 V! w NA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.8 D7 j! V8 @9 ~7 z2 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.
0 [! M) e" C4 {8 {# K" Cbut the value of their assets did really drop significantly.
5 L0 V4 d; a, U8 J' y3 c* e8 g0 T% k% I& [ S# |* f
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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