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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.
. y+ x& X! z2 d+ ~6 vCDs could have different ratings, AAA -> F,2 [4 |& @( b' e
more risky ones would have higher premium (interest rate) as a compensation for an investment.2 u( d/ q- m z
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,( B8 K+ |2 |: F" k% t _
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
# H( N, z+ p) Q( Y# [6 V3 N1 TAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
* T# V8 R& b$ Y, c" ?; esimilar to bonds, CDs trading in the secondary market have different value at different times,8 M( b! L" D( e! \' e) o
normally the value is calculated by adding it's principle and interest.
: u4 p) m3 L! q) g; h* P- \eg. the value of the mortgage+the interests to be recieved in the future. $ a4 V1 g. `4 @, ?/ ?7 m1 g+ p
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.
% I" d! G5 k2 E) k
$ u' u: t: w+ T- N Him not quite sure if the multiplier effect does really matter in this case.2 {8 }( M8 E1 |) B1 a: P) t6 W1 A, P
in stock market, it's the demand and supply pushing the price up/downwards.' ]0 {( k) g, X* I$ V
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,- J. N7 d1 d' [7 [9 u
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.' @( K: S4 s$ T' K. c
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. 6 `+ h& O5 M; ]8 F/ b8 m6 \
but the value of their assets did really drop significantly.* c$ v% @$ ^. q0 f! C
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[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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