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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.
, N/ l( S3 q0 m* J X( ICDs could have different ratings, AAA -> F,
5 |) n$ O8 T) Wmore risky ones would have higher premium (interest rate) as a compensation for an investment.# I) {- Z7 K- K. f6 _
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
3 u& g7 L9 Y- D5 P4 v% @* d* Min other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
: z/ Y$ [* n; ~Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
4 j J5 U. l' s2 D% P% z2 T5 q x/ j& gsimilar to bonds, CDs trading in the secondary market have different value at different times,: U: d9 g: D# N. T, @% M
normally the value is calculated by adding it's principle and interest.
( ?8 G- {- R2 M+ g- N+ g0 Y1 Oeg. the value of the mortgage+the interests to be recieved in the future. $ q$ c' p+ `0 l) x! z
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.
9 Y) X1 ?0 s) V" X8 D4 }; |
& p1 r$ r4 ]! W5 D4 v9 f: M2 U- [im not quite sure if the multiplier effect does really matter in this case.
. Q5 x, Z/ |$ _+ X) J; ]in stock market, it's the demand and supply pushing the price up/downwards.
* L) {( F0 `- U* ?" c j1 YFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
1 v2 A9 A' f P6 u$ A6 oA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
1 G9 a1 z% E! Z$ u8 YThe 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. , \) p# W$ J" H4 O
but the value of their assets did really drop significantly.
/ g( y7 V! J! W3 }9 e( l6 z6 m( w' y# a/ o- k/ j; N. ]7 R% H! f
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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