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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.: r# K& m0 |6 [, ]
CDs could have different ratings, AAA -> F,
+ m' f3 D! H7 Qmore risky ones would have higher premium (interest rate) as a compensation for an investment.
1 x- Y6 {7 T$ B, d) K& b: xmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,7 f2 T: \6 n/ ]' h3 p& J& f w- k; \
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
3 q# }) J! @7 h- h* _Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
7 Q% j9 W0 g. ~. H t2 k: p Q, Csimilar to bonds, CDs trading in the secondary market have different value at different times,
* w5 l: k9 [" ^4 H! }normally the value is calculated by adding it's principle and interest. * L6 u) V+ R0 X) G
eg. the value of the mortgage+the interests to be recieved in the future.
/ l R* i3 j$ R 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.
: k0 i4 X) ~" z; Q: x- i8 Z! K9 B% e+ B: Q% d& M; g- ^* i
im not quite sure if the multiplier effect does really matter in this case., L+ G e, E( G/ I5 R& I: @6 x( S7 U
in stock market, it's the demand and supply pushing the price up/downwards.3 @$ v0 L3 M+ L* W; E2 m2 R
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
8 n" B4 u8 A) p/ ]! lA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
: ]2 _' n R4 T1 pThe 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.
( Q8 M6 y3 d8 j) D- \5 |but the value of their assets did really drop significantly.. }, o- h; a+ ^$ C6 V
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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