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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.
* N" ^: l/ x8 s; {, j; M$ {, H% d) L: oCDs could have different ratings, AAA -> F,
: v- W/ Q/ j5 V: V! ~, |8 Xmore risky ones would have higher premium (interest rate) as a compensation for an investment.
' F, I. m. A' {3 c! Tmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,# \5 Y+ o$ W9 D& u4 H8 V9 O" W
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
: j. V3 g& b" Y# v, tAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
& S' h* x. P: J; c2 ~" t* Ysimilar to bonds, CDs trading in the secondary market have different value at different times,8 N/ v+ Z9 f" A5 x% U
normally the value is calculated by adding it's principle and interest. - `( w) I$ a J
eg. the value of the mortgage+the interests to be recieved in the future.
}7 C- I$ a- V" G; C4 p% Bbanks 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.4 o1 {$ M u& L" Q$ {
3 r, M7 s9 x2 F1 m! Xim not quite sure if the multiplier effect does really matter in this case.4 _0 R$ Y8 G0 l+ C3 s8 ?4 y8 h
in stock market, it's the demand and supply pushing the price up/downwards.+ N* D7 x& Z+ H8 D
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
, |( ?0 B! w/ s' mA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
+ ]3 N- K. {5 lThe 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. ! w, s' w) l% e$ @9 ^
but the value of their assets did really drop significantly.* s9 Q3 @0 I7 G- ^& |. l/ b
- l0 [$ W. [( P# {: t9 U2 k2 o" [
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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