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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.3 d3 [ b; f3 T) q" S# c
CDs could have different ratings, AAA -> F,
# o- e) i' U+ @# T2 t! emore risky ones would have higher premium (interest rate) as a compensation for an investment.; J2 j- p4 E) G; H$ T6 F1 Y4 I
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,# @! @1 y, }4 x$ p( V
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
/ L- j3 g. R" q" f& u6 q, dAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.* Y% V) f4 h2 Y/ Z5 w
similar to bonds, CDs trading in the secondary market have different value at different times,
$ v; Z$ Y( O4 H/ d+ I+ dnormally the value is calculated by adding it's principle and interest.
- v! I) D q5 p) K) N/ C8 v. Aeg. the value of the mortgage+the interests to be recieved in the future.
2 q* K6 Y8 b5 o- K# |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.$ ]4 [7 f( O8 k$ l8 t# s( _# x3 j+ U
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im not quite sure if the multiplier effect does really matter in this case.0 F2 W* f k. q/ [
in stock market, it's the demand and supply pushing the price up/downwards.
o+ L) D1 {9 P3 E2 sFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
, ?# v( U3 }4 M) H* \9 @, K: G1 XA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
% ], o7 @$ e2 u5 gThe 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. ; H% g0 d+ M, z) h+ h M# `/ ?, O
but the value of their assets did really drop significantly.
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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