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發表於 2008-10-8 07:03 PM
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i thought it is the reason of rate of return.
: j7 \8 b( s; l( g9 y- PCDs could have different ratings, AAA -> F,& A7 Y# j3 H! |/ u# G
more risky ones would have higher premium (interest rate) as a compensation for an investment." K: w, U# n5 H7 }/ h6 ~( F' ~1 c; h
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. \0 C" U9 X2 v$ ~in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.5 c) R. K* W8 u) I3 |% v4 B
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
- i" {2 r/ B, ssimilar to bonds, CDs trading in the secondary market have different value at different times,6 I8 W* ^$ w" m% n+ j1 m# W
normally the value is calculated by adding it's principle and interest. + q4 v7 _, g' |4 u& n! Z( C
eg. the value of the mortgage+the interests to be recieved in the future. - Y) q! T- ^5 K1 a7 }" i1 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. Y1 {+ k4 E7 d6 m. c
, j8 h* @, ]3 B* o; Bim not quite sure if the multiplier effect does really matter in this case.
1 S& r3 n, g7 M% J" Tin stock market, it's the demand and supply pushing the price up/downwards.( u" o9 X( l4 h4 D
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,, R! [6 Q# p6 x: U1 t# x1 c$ |: e
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.; n# u+ E J3 I% K
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.
0 A" V5 p. G/ ?but the value of their assets did really drop significantly.
8 c& q6 H% `0 q
8 {2 X; c) S* E+ T1 @[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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