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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.
8 p4 N, F8 s: }" j8 yCDs could have different ratings, AAA -> F,+ U5 S% Q) z; u0 j- g
more risky ones would have higher premium (interest rate) as a compensation for an investment.
/ M7 k. Z1 P+ ~main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,- {2 X# ~: ^2 s9 Y
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities., @; m3 K8 C- O. t( a
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
8 N1 T) e# m7 h2 l# f: t, M* c- Q9 [similar to bonds, CDs trading in the secondary market have different value at different times,
+ y. k- Q) d i) Enormally the value is calculated by adding it's principle and interest. 0 b: }2 T1 \. p( i, G
eg. the value of the mortgage+the interests to be recieved in the future.
- H4 v5 P) B8 w3 }( f1 c0 Abanks 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.- X( O) U& _" n* S9 K
- a0 O) }2 F. G4 Mim not quite sure if the multiplier effect does really matter in this case.' s8 \5 F; J" Z( E" B5 j+ {/ ^- D3 e
in stock market, it's the demand and supply pushing the price up/downwards.6 ?$ T) u; K2 v: [ m" t
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
% m; R' J8 Y3 ^: G# \6 c4 GA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
2 ?" I7 V: m2 W; w3 A* X! ?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. - f1 ~6 z( U" S# P
but the value of their assets did really drop significantly.
3 _, w$ P3 p( {. Q; j2 _# B6 G+ `! h3 b3 u4 |" ^- I
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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