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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.
: u3 Z& ?6 H/ F+ o, c) }' gCDs could have different ratings, AAA -> F,
9 L$ i3 z7 k6 R- t- C" D- l9 _2 g4 xmore risky ones would have higher premium (interest rate) as a compensation for an investment.
' F, T1 s4 S3 d1 G& `main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,' l$ @- n9 f1 h( D. p: d
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.( o3 I8 `/ j; l
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.1 d% O! Y) e2 `7 a% C+ y2 r" ?
similar to bonds, CDs trading in the secondary market have different value at different times,
9 q, i4 I! Y' F/ S- [ l! t" x1 p% Onormally the value is calculated by adding it's principle and interest. . Y" d/ @, u" y" Y* C7 n
eg. the value of the mortgage+the interests to be recieved in the future. ; s8 a. z3 D' ]& f/ D
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.
- c- ^8 f4 _' h& S7 d/ @& w/ G' Y: H, {5 t% a
im not quite sure if the multiplier effect does really matter in this case.* I9 c9 q/ S }
in stock market, it's the demand and supply pushing the price up/downwards.
# `1 t! ^2 z# n% B7 [8 A5 WFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,2 k5 f8 O/ x; M& W7 k; r7 r# ~
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
* z# ?8 @! S9 w7 l# RThe 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.
! k8 l; x6 G" Y/ cbut the value of their assets did really drop significantly.
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4 z/ L5 g! k" R9 S% U) [! U[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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