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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.
/ S" ]7 ~+ J0 z3 L& [, e' zCDs could have different ratings, AAA -> F,
& D/ A0 E' I3 U& F3 W; M) ?9 Z& I: Wmore risky ones would have higher premium (interest rate) as a compensation for an investment.
+ I0 p1 o, E6 \$ H! u) Ymain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,! d3 D; b9 U% P, |+ {+ H% ^9 B
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
3 N" a/ w0 D1 M2 AAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
. i6 C% v. o# O/ Ysimilar to bonds, CDs trading in the secondary market have different value at different times,
3 `6 I6 I/ Y; K4 M. bnormally the value is calculated by adding it's principle and interest. : H/ Y$ e; B; X9 |* P# C8 u
eg. the value of the mortgage+the interests to be recieved in the future.
R3 t7 ]* J" M& Fbanks 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.
! F( o" f$ C0 x; Q, N1 R# @) q2 X4 x, Q
im not quite sure if the multiplier effect does really matter in this case.8 a5 x& G9 R. e/ J6 t, `
in stock market, it's the demand and supply pushing the price up/downwards.) S/ B `. w8 e9 i4 O- |
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,* ~& B" ~. y6 O' ^
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.; _" b9 K1 }1 e/ Z, |4 m/ ^. q
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. " ]- S: e$ w; x) U! z, c0 [
but the value of their assets did really drop significantly.
3 D V1 E1 a8 v3 m2 }2 B; j D8 }7 F: g, y& \3 u" E$ B+ O) K
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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