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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.+ T1 o) x6 F7 m+ j- p
CDs could have different ratings, AAA -> F,; }, J2 @- ] r% r; }
more risky ones would have higher premium (interest rate) as a compensation for an investment.+ m6 A- ]9 f2 C s' b
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
1 i$ D( w: `% q2 X. cin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
+ o$ w# O& X7 iAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.( j4 ?* W$ t0 W. O" X5 c0 A
similar to bonds, CDs trading in the secondary market have different value at different times,
# q3 L# o* [# C0 P% ~normally the value is calculated by adding it's principle and interest.
+ v9 k3 M- Z$ {eg. the value of the mortgage+the interests to be recieved in the future. - r( W3 g* F3 ^: r0 [& j1 L
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.5 _* P' |' N/ Y
in stock market, it's the demand and supply pushing the price up/downwards.
+ j. L7 W5 M7 I" o+ L" _) YFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
# f5 e% Z) R! Y( `* oA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
5 i2 t- z( s; R2 \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.
. h( s1 }. p: H9 D' Ybut the value of their assets did really drop significantly.
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2 ^% g; J! Z5 G6 ~; X8 r$ {[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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