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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.
9 U* F' Y$ Y3 ]# k' y9 ACDs could have different ratings, AAA -> F,' |3 `8 A1 |6 O [
more risky ones would have higher premium (interest rate) as a compensation for an investment.
+ l/ _# l- G& ]. P: E) i" q/ ~main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,& [" o" Q! c9 t! c% W" `+ t5 X9 V
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
- O& m/ }8 v0 x i( M0 AAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
0 r, W, Y2 U( ~, ^% g6 ~similar to bonds, CDs trading in the secondary market have different value at different times,
9 O7 R) d. t3 O) S; z9 pnormally the value is calculated by adding it's principle and interest. $ G1 {) {/ c& H% m5 H3 z( a8 o) y
eg. the value of the mortgage+the interests to be recieved in the future. + X* c( ]9 b3 u1 c4 X* }! |# f
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.* T* q9 [6 J2 l; i) c- L
1 Z1 ?2 I/ a2 g& H5 Lim not quite sure if the multiplier effect does really matter in this case.
' c/ N$ `5 F4 F: @2 win stock market, it's the demand and supply pushing the price up/downwards. H& b* w& ^, ?" ?2 n( [) r
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,! R+ f& y4 u$ i4 x: {4 U
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.+ A1 i7 m0 K, e, C: Y6 t
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.
! W' t, X5 o9 Z1 j' s& mbut the value of their assets did really drop significantly.
! l9 [5 M1 p; U( H+ \
# v2 U2 L8 t1 \5 j8 j[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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