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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.
0 x# b4 X; i. MCDs could have different ratings, AAA -> F,6 o0 f7 c3 z# o0 ~- g( X7 \8 o1 o
more risky ones would have higher premium (interest rate) as a compensation for an investment.
! v7 f+ ^( ^1 I6 W @- q pmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,, c* ]8 I0 M% h( E( s
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
: r; N7 Q; f$ w+ oAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.2 c" G; C" Q% \5 S; c# F
similar to bonds, CDs trading in the secondary market have different value at different times,, _1 ^6 `% b" S% F
normally the value is calculated by adding it's principle and interest. ( p8 b9 e& Q. R+ j, H
eg. the value of the mortgage+the interests to be recieved in the future. 4 n! I0 K6 N# }5 O
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.0 y* m& x& y l7 z5 P/ j& N
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im not quite sure if the multiplier effect does really matter in this case.$ n- T# `& d. \, {
in stock market, it's the demand and supply pushing the price up/downwards.& z8 N: R! t0 d3 @* X* h
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,* c% ]; B% N4 v/ d8 K7 a5 f2 a
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
. P% a S" M b4 X7 cThe 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.
; Q2 O: B5 a0 G$ A- a9 c2 K8 wbut the value of their assets did really drop significantly.; t* [, S! B$ Y) ?1 q* }7 `7 v
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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