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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.
2 l j" M; Y( ^5 F- k7 G+ dCDs could have different ratings, AAA -> F,8 S Z; y: I- y) |0 v5 O. b* }/ ?* l3 X, D
more risky ones would have higher premium (interest rate) as a compensation for an investment.
+ Y; G/ S/ L3 H/ s* ?main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
5 E0 x& H2 Z; ~4 V4 [/ O: O- [" ^in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
8 s* [; Z ]8 H* g2 N7 ]! n, [Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
) @. w5 v9 B- p" ssimilar to bonds, CDs trading in the secondary market have different value at different times,
. _' @. Q" r$ y0 knormally the value is calculated by adding it's principle and interest. 2 ~* w, t4 k, G) n( D2 r/ W
eg. the value of the mortgage+the interests to be recieved in the future.
$ _8 [% K- x# v. V- kbanks 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.: R! Q. w2 R# ?
0 D# L6 C X6 K+ @" Q7 O* mim not quite sure if the multiplier effect does really matter in this case.& U$ O* K- F$ O. S5 @
in stock market, it's the demand and supply pushing the price up/downwards.2 p3 F* p" s L8 v4 b
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,( x2 m$ e; c& T! W
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.% z! Z( @8 |/ b* v2 n+ p" S
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 z" T% p; M2 [" M [but the value of their assets did really drop significantly.3 x! V) P+ Z/ ]/ h
: ^. @/ e( u' h& g0 Z7 U[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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