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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.
" U( m3 v3 ^( W+ q) KCDs could have different ratings, AAA -> F,) w: P6 A) c0 B; p5 W# w, M, D
more risky ones would have higher premium (interest rate) as a compensation for an investment.2 L; s: A; i m X1 P2 _
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,2 T, r+ R% T0 b; Y4 H. V' y% P6 d% ^! o
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.8 m9 N- n) A6 q0 j3 R
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
. J( r4 Z* I) Vsimilar to bonds, CDs trading in the secondary market have different value at different times,0 I% _ g. Q# ~8 |
normally the value is calculated by adding it's principle and interest.
G( k; T K5 Reg. the value of the mortgage+the interests to be recieved in the future. 5 L$ B j6 e( P7 \
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.
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im not quite sure if the multiplier effect does really matter in this case.
8 v: A B; h2 u6 tin stock market, it's the demand and supply pushing the price up/downwards.% p' m7 F# R5 D+ F; K) o5 s H
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,# i0 v8 [; [$ o z- n" g) L: i
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
# }. a% h# k" M& `1 }. F- n& wThe 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.
( T3 V4 w9 w8 {/ c7 t: _but the value of their assets did really drop significantly.0 L" ~& z N h2 n" s o1 U
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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