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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.
- C! y. E& h) @; f+ Q/ ECDs could have different ratings, AAA -> F,
8 e# l: u0 W3 ?. Z* Y/ V9 bmore risky ones would have higher premium (interest rate) as a compensation for an investment.1 d2 h- w- G! ^# s6 W
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,3 `4 w- L8 z# U" s1 I
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
/ k5 o5 x4 l, `5 M* S; q5 V |) MAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
& ` u! ?5 d; csimilar to bonds, CDs trading in the secondary market have different value at different times,
4 ^% A' e- ]) n2 v# t' i8 `normally the value is calculated by adding it's principle and interest.
% ?2 J& F) r% a* m( J3 Beg. the value of the mortgage+the interests to be recieved in the future.
( \+ z* Y. ^* k% ^' g d% g- U3 m, `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.9 z4 P1 _+ W* r- A* p3 ^
- N' ~8 |$ l4 g d: I, p$ t
im not quite sure if the multiplier effect does really matter in this case.; Q# j5 a2 Y- S, L9 U8 P% Y: n
in stock market, it's the demand and supply pushing the price up/downwards.
) V& t' @/ z& w% k5 lFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,; }2 @2 `( x- i8 K2 ^
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.3 U& A$ }" `5 G& g7 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. 5 ^8 w, ^. O) f% O) L
but the value of their assets did really drop significantly.& i5 K' U5 ~# `. Q$ a! k8 l
, o1 S" w# F+ \6 _
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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