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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.9 G* v0 Q& p# Q( _' a+ k6 X$ C
CDs could have different ratings, AAA -> F,& v; O+ V6 n/ C' ^/ Y$ M3 ~8 N
more risky ones would have higher premium (interest rate) as a compensation for an investment.
d& v" U" w& C! [7 C4 Nmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,# o; u! ?' X$ S: u+ b) E
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.# S) Z `3 ~( v f7 C6 O7 n, A% v
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.! F) e: R$ M8 a% ~# F+ `
similar to bonds, CDs trading in the secondary market have different value at different times,1 c8 n0 \0 v7 ~3 r3 ^% \. }
normally the value is calculated by adding it's principle and interest. 5 a9 F4 R' X. f0 A6 O
eg. the value of the mortgage+the interests to be recieved in the future. + g, d8 p- J7 ]* F( [% A
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., \2 O) p9 k1 i% ]! c* z4 y6 e
4 K, L: x! F5 w: V$ oim not quite sure if the multiplier effect does really matter in this case.
2 p/ x0 N. U1 S6 Y' _2 \* B: qin stock market, it's the demand and supply pushing the price up/downwards.
9 [6 H. d& o0 c5 \/ K* f8 RFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,: K$ s1 Z" g' R: k* a* q& o' o
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
# ]1 ?7 E0 z4 n8 q) dThe 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.
4 X( |- F3 v$ O+ k' wbut 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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