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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.
7 b6 |/ U; m) X2 ICDs could have different ratings, AAA -> F,9 s. p6 |3 f+ s! ?- @' o
more risky ones would have higher premium (interest rate) as a compensation for an investment.1 e& \3 G# e$ J& z; c# \2 l
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
5 q. C/ f0 R5 jin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.7 z n& M) e- ?
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.# ?+ X# y, D- q X7 }
similar to bonds, CDs trading in the secondary market have different value at different times,, ]% M% A9 t* l8 k6 h+ m; I
normally the value is calculated by adding it's principle and interest. ' g) O0 u. Y. ]7 q% T/ M
eg. the value of the mortgage+the interests to be recieved in the future. ) h/ A8 k% O3 U _
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.% W/ q3 u+ c) y9 w+ v1 x+ `. Z+ G
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im not quite sure if the multiplier effect does really matter in this case.
9 d. ]9 W& e7 t! I: fin stock market, it's the demand and supply pushing the price up/downwards.) L% W1 J3 ?% ^! i) E# W
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
\. j- Y, d0 K% O+ hA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
2 S f G$ n1 K) ]' Y& 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.
3 e% G$ m3 J0 F. Q$ L$ qbut the value of their assets did really drop significantly.
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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