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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.
6 x, L: X( d' }1 |. }CDs could have different ratings, AAA -> F,
( l1 o1 s9 W( P2 x: R+ S; ^: N( M2 K* hmore risky ones would have higher premium (interest rate) as a compensation for an investment.
" u/ H3 K7 j" M; Z8 J m$ y9 umain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return, y2 ]" |7 t! A
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.: q2 l/ o" h/ g/ P* A* t% A4 G
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
" Y) |, V. W& k' O/ u& L( ssimilar to bonds, CDs trading in the secondary market have different value at different times,6 [5 n% [% M0 n/ ?+ @+ o
normally the value is calculated by adding it's principle and interest.
3 N" {) V2 I1 y# |eg. the value of the mortgage+the interests to be recieved in the future. 6 }; \! o! q' V+ Q
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.( r$ J, A* f$ Z! O3 Z5 U
3 x. F3 n% U9 x* H' T2 Tim not quite sure if the multiplier effect does really matter in this case.
6 c% f4 Q0 z- T rin stock market, it's the demand and supply pushing the price up/downwards.3 q; B$ K# _, n, G6 k
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
0 T( U- _6 p+ ?5 mA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
9 p$ d. V- f3 _# m. |; ?4 g sThe 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.
& x+ [( K) ?3 @. K( K! @) \( kbut the value of their assets did really drop significantly.
5 G* \0 j4 i8 t* k# U- Z$ J, c$ n7 o. F1 r! t( o
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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