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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.5 d$ ~! K5 I! o% h
CDs could have different ratings, AAA -> F,
# f7 [1 t$ b* O* Y! y. W, Nmore risky ones would have higher premium (interest rate) as a compensation for an investment.9 n6 R6 P4 s* V/ U, n
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,! B: M" c9 d" Y% [% T- r/ p7 Y- ]
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.; p, r) j( F" t4 s! R& A
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.- i, Z. k( V, p9 y
similar to bonds, CDs trading in the secondary market have different value at different times,
- Y' u1 Z/ T9 s. I# }normally the value is calculated by adding it's principle and interest.
; q0 V* G+ n3 i- e# xeg. the value of the mortgage+the interests to be recieved in the future. 2 a; e" O1 ~' Z8 s
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.$ R6 ~; V6 \. W5 m* d1 F
in stock market, it's the demand and supply pushing the price up/downwards.+ M% w6 [3 _1 Q/ g# ^6 U# J) i. R
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
0 l( a* p5 u7 \! T2 U# C# K& a0 fA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
, k3 X; x1 c# Z* a3 N* 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. " k8 t! b) |2 a: T1 z9 w; @0 Y
but 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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