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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.
9 Q( G* ]& U4 V2 oCDs could have different ratings, AAA -> F,
6 x; F7 n' L6 W+ B9 Z2 pmore risky ones would have higher premium (interest rate) as a compensation for an investment.5 R: w1 _6 E6 S' ~2 g& V8 G$ ]# U; v
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
6 Z* R) R" v; e5 z4 n8 ]5 win other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
1 X5 \: X* q% y7 C" n9 iAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
. D0 k, Y/ q5 H+ {similar to bonds, CDs trading in the secondary market have different value at different times,
: G: J3 m7 Q4 s5 u7 t3 Bnormally the value is calculated by adding it's principle and interest. / l' _! [7 r# ^: W1 `+ Q* d
eg. the value of the mortgage+the interests to be recieved in the future. + d5 ~1 c5 H; V4 j" L; @" \, ^
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.
$ H" F# z* `9 P( ]3 ], _5 B
' F7 n/ j% Z9 s" q7 T4 Fim not quite sure if the multiplier effect does really matter in this case.
0 V4 h9 C- _0 U& N! o4 K" win stock market, it's the demand and supply pushing the price up/downwards.
: j7 g3 @) Z* N2 a' |% P' {For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,- X, x- s, c h: |. ]
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
* f+ B$ g! V& W4 O' O* ?' G& ^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. , j* V. E7 ]2 {) U0 c- e# ?
but the value of their assets did really drop significantly.
! F: F6 w: R7 o5 ]' w, k4 c6 P2 W, D1 j- H" h4 L& D' W% R" ?
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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