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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.
: q' c0 L# v+ i2 uCDs could have different ratings, AAA -> F,
& G( ^1 v" V+ d7 K7 [; zmore risky ones would have higher premium (interest rate) as a compensation for an investment.7 Q) ^7 x8 G A+ w9 |& c, Z
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
7 ?7 `( \5 _' H* i& _" b7 {in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
3 {# V4 b, U2 Q" EAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
2 X% r0 s. w* C( ~9 {; Zsimilar to bonds, CDs trading in the secondary market have different value at different times,; S8 d- Y- Z0 W4 `' [5 q6 K9 y2 q$ g# v
normally the value is calculated by adding it's principle and interest.
% i9 X+ T6 P9 [5 m" c# X% o/ zeg. the value of the mortgage+the interests to be recieved in the future. , x C6 o, ?% y1 p# e) W9 Y
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.' }* [8 L3 `% r( y) z
- i' A9 B6 F3 ]/ f d; {' H/ J
im not quite sure if the multiplier effect does really matter in this case.! [: E, F0 z0 g) F& s5 @
in stock market, it's the demand and supply pushing the price up/downwards.
+ B# I/ J! @5 C& K- F6 _6 dFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,( H4 s' r: E. u
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.( b' l0 c! w, m o
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. U/ {; H( b& @: [- L f9 N
but the value of their assets did really drop significantly.
7 g7 |4 p3 ~3 z3 w0 t! [1 ?5 R4 l( j0 @' X: g
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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