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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.
9 z& j7 o# A& |! }+ _CDs could have different ratings, AAA -> F,% A& I. b* b( R" K
more risky ones would have higher premium (interest rate) as a compensation for an investment.
" @* M8 _+ P5 F Vmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return, L/ q& s/ ]# Q
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.' P; S; B, g& X6 n
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
- v( {1 L1 l N, [similar to bonds, CDs trading in the secondary market have different value at different times,
# B0 i) r% ^1 V3 {+ A1 R$ ~normally the value is calculated by adding it's principle and interest. ( y# k8 O% {9 L4 @* b- }, j7 W9 G0 j3 m
eg. the value of the mortgage+the interests to be recieved in the future.
& A* F, X4 i' v8 Jbanks 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 k7 m6 G3 r+ o2 q3 y7 n/ N: f
+ p3 X; [7 F$ h+ T3 pim not quite sure if the multiplier effect does really matter in this case.; }$ E0 B1 S! W' {
in stock market, it's the demand and supply pushing the price up/downwards.: w2 _/ y9 y) n, l4 H
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
/ |* C6 `# @/ d& n uA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.! I! b7 P! }5 I; c8 o" ?0 n
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.
8 o! K5 O; f' A. P* b! `$ dbut the value of their assets did really drop significantly.( a' u/ V. E( g6 Q9 J
4 k% c0 A$ t, e- a: ^3 i[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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