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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.
4 r( l+ I6 k w* o8 eCDs could have different ratings, AAA -> F,
- Z1 {6 F' o% C( Q* z6 q3 zmore risky ones would have higher premium (interest rate) as a compensation for an investment.0 W n+ B) U* y i9 I
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,5 ? M% X1 `: c& ^; V
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
" @2 _. G3 a( G' }( G8 D4 zAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
" q c+ R/ o6 I. c+ t. _similar to bonds, CDs trading in the secondary market have different value at different times,
9 t( }4 ^6 _3 W" }normally the value is calculated by adding it's principle and interest.
( @% P% w8 E6 D q! q+ A5 reg. the value of the mortgage+the interests to be recieved in the future.
3 u0 V5 c% O3 t( e, ibanks 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.' C, C: g# H% \1 x2 w6 M
! O) g$ W. Q2 V8 ]; yim not quite sure if the multiplier effect does really matter in this case.
2 o9 g) W" C* e' B+ e+ tin stock market, it's the demand and supply pushing the price up/downwards.5 p9 C0 {* \; r. N) U8 A7 B) i
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
$ T2 {. y: p, zA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction./ m) `' @/ m9 X! q
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 a* Z. n3 [0 {% J/ }3 r% |
but the value of their assets did really drop significantly.' x. x' J& `; [$ z" N0 u
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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