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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.
8 k0 R" D( D1 MCDs could have different ratings, AAA -> F,: D# d- h, W' S1 w+ l
more risky ones would have higher premium (interest rate) as a compensation for an investment.
- C6 J9 ?3 @9 x5 m ?8 m* \+ hmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
+ U9 q2 {1 X9 t/ V9 g5 N3 Jin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
# e* R/ f% R/ qAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.3 h+ w8 A6 T: e& g( o
similar to bonds, CDs trading in the secondary market have different value at different times," C7 o) i C7 h1 Z
normally the value is calculated by adding it's principle and interest.
" v% x+ U6 c- a) C0 teg. the value of the mortgage+the interests to be recieved in the future. ' [! n6 S& V5 j8 p1 v' ^0 M
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.
/ O* e2 y1 z4 {
9 z' X/ U( c7 E* w$ g9 Yim not quite sure if the multiplier effect does really matter in this case.; K. f7 N' e7 t5 U
in stock market, it's the demand and supply pushing the price up/downwards.
# g; g$ Y9 a I1 T9 X) a. E+ |0 o: IFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
# z% S( I+ p- L: e1 BA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction." Y; J4 U% O6 l* r2 P; K( _; b7 S
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. 4 [) b6 K1 M' U+ M, u* {' C- N6 V
but the value of their assets did really drop significantly.! M( Q5 g: g; P' [( ~5 y
5 X$ I% ~! X5 J6 d, H8 V[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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