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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.
2 Y0 u5 `4 q" W$ j* t3 w% pCDs could have different ratings, AAA -> F,
- H' }7 u+ u0 o; {2 gmore risky ones would have higher premium (interest rate) as a compensation for an investment.
( V$ {5 j7 B% X! [0 lmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return, L9 i! o! Q8 }9 B0 @. \
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.$ r- _- S5 J" `& {- X
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
' `( Y* \, O$ L0 Rsimilar to bonds, CDs trading in the secondary market have different value at different times,% H2 T6 W4 T! c" I% E6 d3 ~
normally the value is calculated by adding it's principle and interest.
. D2 ]& b+ I: Eeg. the value of the mortgage+the interests to be recieved in the future.
" m' k d8 }3 B6 g. a0 N1 qbanks 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.
+ r2 a- R0 N9 x* S% Q1 r, s( Z- [! p0 q) w0 G/ b
im not quite sure if the multiplier effect does really matter in this case.' H( m) n3 ^0 Y( Y
in stock market, it's the demand and supply pushing the price up/downwards.! u" S% h& l# ~$ W& K
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
4 D9 s: f' Q1 d4 [/ D& w, BA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.- v0 W/ Q- k: w% o
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.
) N$ Z% Z6 d! A. ]$ Cbut the value of their assets did really drop significantly.
: j: n! v6 M/ M0 ~9 x7 I3 |0 U( Q) \. T
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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