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發表於 2008-10-8 07:03 PM
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i thought it is the reason of rate of return.
, ^& }& _! J6 E% z1 bCDs could have different ratings, AAA -> F,
3 |6 w( e9 q" s# `9 Kmore risky ones would have higher premium (interest rate) as a compensation for an investment.
6 L* K5 n" ~6 ^2 tmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
6 S7 D* L, z& v$ ?in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.6 n5 v7 s8 C3 N; }, A
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency. v( s8 {. V1 H/ o b
similar to bonds, CDs trading in the secondary market have different value at different times,2 u$ Q, J$ C1 O7 R) C
normally the value is calculated by adding it's principle and interest.
1 |9 X% q1 M$ O/ r, @2 d' Heg. the value of the mortgage+the interests to be recieved in the future.
' L1 K& @. q, Xbanks 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.' ^. n( w) M: e b& e" C! h+ v' X
3 V8 g2 Q1 |3 Z6 I( k' n6 ~
im not quite sure if the multiplier effect does really matter in this case.
9 c; A$ K; B6 A& X3 L+ _ |! }& ?in stock market, it's the demand and supply pushing the price up/downwards.) y2 K- y% J4 w) {) H8 P0 C
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
. A" S) J0 [- F2 _0 r* T VA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.6 n/ o$ v) @% X) }. s+ o
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. ! K e: i4 P. D
but the value of their assets did really drop significantly.
9 l, k# _' I4 N) J) w# Q( Q& i0 S( ]' C- r/ p4 Z' z
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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