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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.
/ R# a) d& h) q6 z9 @$ DCDs could have different ratings, AAA -> F,
* [; \; f% c4 e; F& emore risky ones would have higher premium (interest rate) as a compensation for an investment.$ h" J- M: }& N3 b r
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. g- h! `( k2 b2 S0 jin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
' P7 Q- ~) s+ j* v7 S7 o, gAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.$ Z# e) A% i5 A- [+ T' S
similar to bonds, CDs trading in the secondary market have different value at different times,. b* l0 L5 |0 [5 `- z0 M: n
normally the value is calculated by adding it's principle and interest.
* f& |; Z* C1 zeg. the value of the mortgage+the interests to be recieved in the future. ; _7 C( t0 q; q- L) {- d/ L' P- Q0 s
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.! Z1 K: A3 I+ c! r% p( U1 o4 }% k
9 \$ D0 m$ c7 P4 ]* }2 o/ E
im not quite sure if the multiplier effect does really matter in this case.
. v2 k3 t2 t5 @# g0 hin stock market, it's the demand and supply pushing the price up/downwards.
8 z- T' P, |. Q0 c1 S: B: i; YFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,& a$ i, C$ i- @! w. N, Q
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.% o: i/ s1 y, U& O) f
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 ~' p0 X3 X/ F4 b
but the value of their assets did really drop significantly.
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$ |& q; x! h P$ b H) p# e% a[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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