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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.) _! V3 H; i7 }* Y3 G% C
CDs could have different ratings, AAA -> F,
% [1 a) u1 r" v1 B; e" s6 a0 {* ?more risky ones would have higher premium (interest rate) as a compensation for an investment.
T2 I" p1 d0 E- W+ B2 lmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. H5 g! { k1 x* |- lin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.& I# t( c; |9 W& c
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
% i- ^, l5 X/ @1 ssimilar to bonds, CDs trading in the secondary market have different value at different times,3 V: u/ z5 }) X% A/ [2 M" Z# ~+ Y
normally the value is calculated by adding it's principle and interest. / i; }, _8 `# V0 u
eg. the value of the mortgage+the interests to be recieved in the future. % M5 `6 a# P7 Q4 Q4 u5 ~
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.
4 v! V- q; G2 s9 m0 _# _/ u8 l; U/ V/ C+ q
im not quite sure if the multiplier effect does really matter in this case.
5 c9 W3 @' C& Nin stock market, it's the demand and supply pushing the price up/downwards." f: v' T) ^# V7 Y+ F
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,% H) U: y5 M* Z% m% [
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.0 z a+ X+ f+ h5 M% h
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.
7 I1 N T( C5 ~1 V" J) Dbut the value of their assets did really drop significantly.
& r; @3 Q" b+ Q$ H, z. `: V8 S9 }6 t5 w, h$ r/ ]
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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