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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.
% P6 b( d) h% a& BCDs could have different ratings, AAA -> F,. m3 w1 y1 S0 @9 I, \9 I
more risky ones would have higher premium (interest rate) as a compensation for an investment.
: X( V- l6 F6 u& E* }5 smain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,- ], x# Q" m: G& S& e
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.. N, |. Y3 _# i$ F' _( W8 ~8 S
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.% E9 }5 H S% S* N; f. }
similar to bonds, CDs trading in the secondary market have different value at different times,
0 y K( w( ^, R, y9 x4 ynormally the value is calculated by adding it's principle and interest. . I9 G: a, @, P7 p0 t/ k ~2 s2 I& Q
eg. the value of the mortgage+the interests to be recieved in the future.
1 s) J/ E% P; N. [- o% P8 \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.; Z, X( I; [, J$ V( P
3 h; [- H5 h! pim not quite sure if the multiplier effect does really matter in this case.
/ `- b8 F+ u# n" F" j% ]. ]: R/ Lin stock market, it's the demand and supply pushing the price up/downwards.* N% W: a, R$ n1 J1 G: B1 ]
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
* i, i" k3 x, ?A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
0 \; d4 Y% m- r2 hThe 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' r' I; d0 Z( N
but the value of their assets did really drop significantly.0 |1 p- P; |- w9 O B
) ]3 g4 t1 Y) L! r: n" P5 \4 J' x3 x
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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