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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.
6 V( Z' a" `4 Z0 u* tCDs could have different ratings, AAA -> F,
3 V0 a, D3 k6 U. Ymore risky ones would have higher premium (interest rate) as a compensation for an investment.
. s* e. h8 A5 M: Xmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,5 ~- Y4 P ~; Y- T d. \5 D+ T
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.( q! I/ x a2 k! _; {
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.3 T+ F6 M# X( L
similar to bonds, CDs trading in the secondary market have different value at different times,
/ |8 |% W" ^8 H& b- ~0 I3 h' Nnormally the value is calculated by adding it's principle and interest.
, M3 y- ]7 y3 k0 ^% G" n/ x! N6 Eeg. the value of the mortgage+the interests to be recieved in the future.
( I2 j& X, E- X# Ubanks 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.# R* U. |9 p. a" m5 V
3 V, X! `) ]; j9 him not quite sure if the multiplier effect does really matter in this case.
' A5 }8 B* l+ A9 b/ |in stock market, it's the demand and supply pushing the price up/downwards.2 T. Y* D. J/ `8 Q- S4 }( m
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,( S, t; E2 y2 r2 W8 g4 N
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
1 r* J: H/ T1 K) t; q4 Z5 zThe 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. ; P) ~4 {8 }8 v# r# n% ]* _
but the value of their assets did really drop significantly.- k8 N$ h5 t' h9 }
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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