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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.
1 `7 N0 s: Y, a- tCDs could have different ratings, AAA -> F,3 i* q( Z- t! {( ]% ^
more risky ones would have higher premium (interest rate) as a compensation for an investment.
) G3 W( w8 i {% i) _main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. m8 t! Z6 \& d3 T% {, n; Nin other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.+ S' r p O( p8 |' ] d7 p2 t
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
$ i9 [9 s4 z- q( G; l) z/ Dsimilar to bonds, CDs trading in the secondary market have different value at different times,1 j5 L$ U" E7 {6 v: _9 j5 Q( C0 a) l* }
normally the value is calculated by adding it's principle and interest.
( l; P- c9 Y0 {( ~7 }5 ^* Deg. the value of the mortgage+the interests to be recieved in the future.
1 j9 ~* x' f$ {& l$ Dbanks 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.5 @) J' O+ S4 S9 i8 K
+ E: t7 ?9 x1 ~4 l. r- kim not quite sure if the multiplier effect does really matter in this case.
5 O6 `& e4 U3 I8 rin stock market, it's the demand and supply pushing the price up/downwards.
3 J9 ^3 D! T/ S6 M/ J* u, |For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,2 z8 k3 ~7 X: o/ ~% ~5 v
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
# }8 p( Z Y9 H; w3 i' eThe 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.
) s3 Q5 y6 P- h& W4 l, Rbut the value of their assets did really drop significantly.; V( b7 Y3 U% y; D8 f/ t7 m
- p2 `, y3 H' E7 G6 D T' b( P[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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