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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.
8 e, _( b, ^9 q9 R& v% R+ H* C" nCDs could have different ratings, AAA -> F,
1 D$ ]& [* k# Y5 smore risky ones would have higher premium (interest rate) as a compensation for an investment.) R! `' L6 \# {+ M
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
- B: w' P8 M. a; M' Yin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.3 F1 \; L3 m6 F8 H& f
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
( j' I4 ~4 v: k) Wsimilar to bonds, CDs trading in the secondary market have different value at different times,
& p. g( D( d+ f. k' jnormally the value is calculated by adding it's principle and interest. 3 e5 p8 K9 i! h& o5 [. q, Z* K
eg. the value of the mortgage+the interests to be recieved in the future.
0 g; B, R% H! U4 J' y- H+ dbanks 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! _1 O1 L$ r! g. j/ M) b$ w, T/ U! t1 u
im not quite sure if the multiplier effect does really matter in this case.
% x+ l, I! n# M/ A: J2 N2 U" ?/ Rin stock market, it's the demand and supply pushing the price up/downwards.$ I9 v5 W3 a" ?0 e! ?! n
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
3 M, ] v& B; N; e9 {9 z1 yA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.4 x! _* T G+ G3 ^
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.
+ z5 z+ f# _3 ]/ _. ^) U. n: Z( Nbut the value of their assets did really drop significantly.2 I9 p2 @0 m8 X1 y. ^" k8 Z i
* q0 Z$ C+ J, m) X0 N6 Q[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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