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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.
4 p$ J1 ~6 ]/ A. \$ ZCDs could have different ratings, AAA -> F,( k* B2 S$ v$ n. L3 v3 N3 ~
more risky ones would have higher premium (interest rate) as a compensation for an investment.
( T# x5 W& U; O' B% f0 |! g3 l( Zmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,3 o( t, L* B6 b
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.7 S( V/ E2 ]* I1 `' T. @' G
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.+ N1 O# n$ P9 ^3 q2 ~" F
similar to bonds, CDs trading in the secondary market have different value at different times,9 M+ m3 P, v8 \) x0 ~
normally the value is calculated by adding it's principle and interest.
7 a' {6 @4 [, ?. {4 Teg. the value of the mortgage+the interests to be recieved in the future.
0 i( ~0 M$ Y. M* Abanks 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." A9 _ ]7 m% ]( x& G8 l
; C' `4 P5 k. N2 V
im not quite sure if the multiplier effect does really matter in this case.- C. m8 F# {3 H. {) W: u2 D
in stock market, it's the demand and supply pushing the price up/downwards.
. D( l" Z- _8 A% I4 t8 x+ \! UFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
; J6 e+ d J; I7 t. ^& P; C, D' OA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.$ t& O& f) }2 S. f: Y3 `
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.
: u# u+ f3 e- Cbut the value of their assets did really drop significantly.
# M0 a# E$ ~6 \! f
: J& B" `) m1 t- r[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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