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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.& [1 Q( `8 K' S: m& h
CDs could have different ratings, AAA -> F,3 D+ Q( {2 |; [, j3 p
more risky ones would have higher premium (interest rate) as a compensation for an investment./ A7 J$ @7 H4 O2 G; n0 T
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,9 `- z9 y2 O$ i% G, T
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
5 l1 n0 o7 I* jAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.) }9 i7 ?3 h" m' V
similar to bonds, CDs trading in the secondary market have different value at different times,1 D: J& b% K( p# l1 v0 M
normally the value is calculated by adding it's principle and interest.
n+ y8 }. p, {. G& p$ Qeg. the value of the mortgage+the interests to be recieved in the future.
0 c9 J1 k* M/ g) nbanks 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.
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im not quite sure if the multiplier effect does really matter in this case.& A# I* s& F( C
in stock market, it's the demand and supply pushing the price up/downwards.
* T; I; X L' s" j4 ^( @For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,! z9 g( W: _' `# N
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.# |& p4 E( h+ x0 Y! T5 W
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.
! J* H3 u. V9 n7 Vbut the value of their assets did really drop significantly.! x0 I0 m: s# z
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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