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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.; k- M2 D O6 a& t3 C
CDs could have different ratings, AAA -> F,* I& b! S6 V& x2 D4 a7 T
more risky ones would have higher premium (interest rate) as a compensation for an investment.
3 h5 v3 Z0 I- |9 y; x4 hmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
+ i1 w, R; d- W" ^! gin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
; ?5 K1 ^. O# A0 I% r0 H( eAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
! D$ z' H# E4 x' j8 Csimilar to bonds, CDs trading in the secondary market have different value at different times,
! N8 l3 J+ H& {, n2 J3 d' \normally the value is calculated by adding it's principle and interest.
/ o* S8 f$ H( S {0 Ceg. the value of the mortgage+the interests to be recieved in the future.
X& C# s. I& G1 a" pbanks 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.
7 T1 }! s8 v W4 M
3 k% f+ @0 y5 q sim not quite sure if the multiplier effect does really matter in this case.+ S b, Q# J" p: w5 C# o
in stock market, it's the demand and supply pushing the price up/downwards." j; z9 M% J3 N0 e0 V
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
. B6 N4 o. O# z- eA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
! F5 U K. _. @4 | }9 U4 @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. 3 X5 Z w' ~# Y, w0 T5 Y7 Y& f u
but the value of their assets did really drop significantly.
! k; G. K1 v8 d2 p% L; s# i+ @0 r' v+ s* E5 f
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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