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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.- o, i! W E- Z, w! U- k0 |7 ?
CDs could have different ratings, AAA -> F,( ~2 r# B) d3 i( K" B- L3 b
more risky ones would have higher premium (interest rate) as a compensation for an investment.
: j& e2 Y3 m4 e. T0 i g' @main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,5 A# `6 M g3 R- T) ~ K4 `+ B) H$ i
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
0 y* s: O( `; w! x, ^7 `Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
6 k' B; s5 j1 J4 m! M9 C* zsimilar to bonds, CDs trading in the secondary market have different value at different times,( j$ _! D7 d: J5 z6 H
normally the value is calculated by adding it's principle and interest. 3 n' B' r$ Q4 X, Q
eg. the value of the mortgage+the interests to be recieved in the future.
3 c9 b: U& n, Lbanks 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.6 V( C: S% O6 n4 T
f' d3 z0 M6 [0 G& Dim not quite sure if the multiplier effect does really matter in this case.& P0 s1 H8 D( V
in stock market, it's the demand and supply pushing the price up/downwards./ {* X% U# l z* r$ h
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
) i6 S# `& Z& {3 sA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
; q' c. H7 y8 g0 u9 D- VThe 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.
o$ }& z( d7 Q* lbut the value of their assets did really drop significantly.2 W( M; b5 P" [
" F8 t4 B; Z/ _9 q+ q; ]9 c3 c[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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