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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.
+ F$ }* `7 l& l+ _1 r3 l- v S2 y6 iCDs could have different ratings, AAA -> F,7 E6 [6 h5 C1 I k- c
more risky ones would have higher premium (interest rate) as a compensation for an investment.6 c; g, ?- F" U! u( m; A% x
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
* c" d: Q5 o1 T% hin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
& S" }: J$ Q$ Y; T5 N" p- P- ZAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
2 Z- i5 e/ i$ D ?' `% y$ Asimilar to bonds, CDs trading in the secondary market have different value at different times,
0 u5 X" E( ]5 l% J3 B, H z- m$ `normally the value is calculated by adding it's principle and interest.
+ X& y0 V* y+ ^" M" O$ ~% Qeg. the value of the mortgage+the interests to be recieved in the future. ! ~: o8 f0 s1 K( ?9 q- A* W
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.6 E/ z3 |$ v/ p, l& _3 z; n4 I
8 Y* J$ E+ V `1 |( `0 k7 Z
im not quite sure if the multiplier effect does really matter in this case.
8 j1 X, G% c, K3 ?& n; ?6 _" L! Z! G/ ]in stock market, it's the demand and supply pushing the price up/downwards.
" W+ i8 M+ ^9 `. AFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,3 K. R: C9 Z$ K8 J2 m. x+ ~. p
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.- q0 \: B& W, P5 o' n: A( u
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.
/ @) l; V" q* H0 A( o! @# jbut the value of their assets did really drop significantly.
- M5 }0 V8 ?' _1 l& h1 z3 _$ H6 ]" d7 `. a: h5 R7 |$ S8 p7 L
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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