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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.
# Q" b2 `7 \% uCDs could have different ratings, AAA -> F,: j4 C- m3 r# N# c3 x) P
more risky ones would have higher premium (interest rate) as a compensation for an investment.! t9 U+ e9 i2 d" {, w7 r! k& C
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,: s2 p- C1 e0 \: J- j- f
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
8 S1 U- @# P8 b+ W0 q( Q2 x4 f+ gAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.5 d9 P3 E9 s9 a7 X% S+ v5 Z% y" [
similar to bonds, CDs trading in the secondary market have different value at different times,
# \2 }; X H# i( d& t/ X& Pnormally the value is calculated by adding it's principle and interest. . N, k3 I# D- B8 o; G+ v
eg. the value of the mortgage+the interests to be recieved in the future. ( W4 b2 l# U1 d* i/ C* l% q
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.1 B% d' f! X. y' v8 A. ~
4 n. {: Q" \: G' [im not quite sure if the multiplier effect does really matter in this case.
* z! J& C0 R9 F' J: s* a9 V; N+ nin stock market, it's the demand and supply pushing the price up/downwards.
6 @( n0 v& q' ^For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,, }9 ?" o4 R8 w/ E0 Q: g8 O
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.9 W: z; A1 j9 R" B
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. . g+ c% {' H3 x- V V. b# D5 w2 t2 ` K
but the value of their assets did really drop significantly.
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2 \0 f3 \! w5 b* ~( h[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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