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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 R/ b2 m1 j; t% c( z/ w
CDs could have different ratings, AAA -> F,
% y# ~& f v" b" [& H2 X8 B2 ^! Pmore risky ones would have higher premium (interest rate) as a compensation for an investment.
" Z) y, Q4 h) u: h6 A. |0 Qmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
& ^$ s. y2 f. J% m3 K% i4 z( vin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.9 ^* `; J- s4 e
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
4 `0 L# x7 D2 }7 f6 y: Dsimilar to bonds, CDs trading in the secondary market have different value at different times,( h- u) m' b9 @" Y/ d
normally the value is calculated by adding it's principle and interest. " o2 S L% i$ E: ^& Q
eg. the value of the mortgage+the interests to be recieved in the future. ' ^: n. ~; S; Q' T) |5 D4 j% ?" P0 f: ? V
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. w$ s3 U8 o! [- t7 u8 ?
, j! k1 w' |4 L, h5 ^8 T+ Wim not quite sure if the multiplier effect does really matter in this case.
3 a/ T4 \. |' M2 Q E) K+ yin stock market, it's the demand and supply pushing the price up/downwards.
, B* {4 P9 w& G, ?' y7 U! wFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
) F$ i% F4 b' ^4 T5 G, L; iA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
* O* L0 j# i, \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.
9 H( I/ I# B5 d, X V: ?6 T! @but the value of their assets did really drop significantly.
9 c v1 ?$ z, u: l" M& T0 M/ A; }# v- ?1 c: l _+ p
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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