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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.
, J/ f; u4 I# t: x& }CDs could have different ratings, AAA -> F,, T: u0 g# Y d, V) @0 y+ [
more risky ones would have higher premium (interest rate) as a compensation for an investment. k* V T1 d" ^9 Q) `, ]0 Z. A) o
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,. [+ t. n1 u! H' I3 y
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
0 I& b! p$ y% f% WAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
! ~- z" F6 a* R) k2 g, L _8 h1 Gsimilar to bonds, CDs trading in the secondary market have different value at different times,& w* A$ E$ i0 [
normally the value is calculated by adding it's principle and interest. % ~! A* v7 a3 m( L# m' o
eg. the value of the mortgage+the interests to be recieved in the future.
& s2 b3 ^+ ], V3 _/ a& Ybanks 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.% i9 q* K: j/ x$ p( J4 q
. v/ t5 C+ W, K5 h+ H
im not quite sure if the multiplier effect does really matter in this case.$ _: B ~. V2 s* S1 V3 o6 ]
in stock market, it's the demand and supply pushing the price up/downwards.
1 ?5 p( n! M/ I% a& ^For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12, j5 G9 p3 z8 E; N3 s9 U7 ? G3 J% T
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.5 W6 t0 h. W! F( B8 A5 J/ L; S& s
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 w. ^0 ^- Q/ W( z5 hbut the value of their assets did really drop significantly.7 [/ G: X& d4 k" R" b/ l
! ^% f; _- v" Z
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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