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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.
1 x6 u1 c" W; p2 vCDs could have different ratings, AAA -> F,- L# Y) }2 m: [& _! |' I7 H% x
more risky ones would have higher premium (interest rate) as a compensation for an investment.
( h( S7 T \) i7 o7 O( d& fmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,' Z! y7 ^" y6 {2 Y: p( A' P4 s
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.3 y, u) b& j2 I' j& ?1 S% U/ I* l
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.* K# e P; x, n4 E0 Z) y5 n$ K
similar to bonds, CDs trading in the secondary market have different value at different times,
# n1 x, t1 i7 g. @6 Q: _normally the value is calculated by adding it's principle and interest.
7 ], b/ y7 Y8 ^" y4 Q% p( g% seg. the value of the mortgage+the interests to be recieved in the future.
& M2 L1 P- Q3 L6 e; |! obanks 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.) E$ m2 f: S1 b7 P
! ]2 E: [) D9 k, M! O: g) y# E: dim not quite sure if the multiplier effect does really matter in this case.
% i6 _4 q- Z5 E/ u; ?$ Sin stock market, it's the demand and supply pushing the price up/downwards.4 J! A% P0 {* U0 ^
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
2 X" a+ X0 S4 t+ f- Z# z0 v8 [A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.# m3 {, s$ d: \, }% i' r+ d- P
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. - Y0 A* P+ o+ F! E' }
but the value of their assets did really drop significantly.$ Q8 O; f' ~4 i6 |( n
6 v3 A9 m+ O! k/ Q[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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