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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.
# f5 K6 y' x7 _& n9 sCDs could have different ratings, AAA -> F,0 _+ h( s; s m3 p' j
more risky ones would have higher premium (interest rate) as a compensation for an investment.
' r( q# [/ }5 Q! Tmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,( y0 U& j' C" z; a% z/ `; Z
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
" i* v+ g' |* o+ r; IAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
) K- q, ^7 N. K y }+ ~' m0 csimilar to bonds, CDs trading in the secondary market have different value at different times,
* u* r1 @! _% F2 C' mnormally the value is calculated by adding it's principle and interest. ! m" c* E1 R* r' M- G! K% L
eg. the value of the mortgage+the interests to be recieved in the future. 8 T7 M; m) b) @, F8 ]1 I
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 I+ J$ i* h: r6 c. N$ @& w
7 H9 o0 _, `0 k9 h* y7 `/ Y( bim not quite sure if the multiplier effect does really matter in this case.' ~0 ^+ Y3 l8 B P0 O, i
in stock market, it's the demand and supply pushing the price up/downwards.6 f) Z5 A# I$ V& E: K% c& \$ @% @
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
% t- T( [* T/ N6 Q9 J hA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction. {) j3 X' I% S/ s
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.
$ T/ b9 x, W; k1 bbut the value of their assets did really drop significantly.3 q0 r8 R0 g7 O: p: t/ d9 p
, k* K- W% B) H6 {% e) h* t; T
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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