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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 C' S2 q2 q- }" ECDs could have different ratings, AAA -> F,/ U$ A" u) J3 |" U
more risky ones would have higher premium (interest rate) as a compensation for an investment.: |$ B) b, l4 F5 Y
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,* ~3 \7 q' m Y2 P5 G! s
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
% ?2 f- P, o# `4 H. L+ `2 SAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.2 R# s( Z& t; x$ j: _# H0 V1 [
similar to bonds, CDs trading in the secondary market have different value at different times,
$ c# [0 Q& [+ b! q0 p; Ynormally the value is calculated by adding it's principle and interest. * ?4 I' e! z: O6 d" }, E8 r
eg. the value of the mortgage+the interests to be recieved in the future.
2 N: c( o3 T- J2 `5 Qbanks 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.
' j4 \# @: _& g3 d( }
& H/ ~! w5 O1 W3 |* y- X$ S' kim not quite sure if the multiplier effect does really matter in this case.
. V" t. x7 D# v% X! ~in stock market, it's the demand and supply pushing the price up/downwards.4 \: ?: |+ A" P! ]
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
; p7 p+ b2 E! [) B: [A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.: T6 h2 O$ k. c) e+ @5 y& i
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. . B2 @* |9 w' C& S% l6 l' S
but the value of their assets did really drop significantly.
j5 ?* H2 U$ G7 v' M) G& m3 V6 L7 F, l3 C' d S% u6 }
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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