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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.1 w* G4 K6 R) W$ ?# ~6 X g
CDs could have different ratings, AAA -> F,
- f( U4 P) g) u, ^3 ]more risky ones would have higher premium (interest rate) as a compensation for an investment.% A, P4 Z" F5 d1 ] M+ S/ I# W
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,3 \9 A" Q$ \9 G+ Z0 B) n" }; m. D6 X$ a
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.9 _0 d+ n" v' m) z
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
- }1 R6 ` a, x4 O, gsimilar to bonds, CDs trading in the secondary market have different value at different times,
' T& e4 N( c6 C) q2 {- V l4 [normally the value is calculated by adding it's principle and interest.
9 a' s; ~3 x1 M& H: I" Geg. the value of the mortgage+the interests to be recieved in the future.
. |5 ]8 z4 M. \% B2 o. 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." ]5 t' W) d* `% f
$ C; O3 {; }; h3 w( x2 O4 q, h
im not quite sure if the multiplier effect does really matter in this case.
! q3 K7 H+ F: O, `2 zin stock market, it's the demand and supply pushing the price up/downwards.5 S+ u. k! P9 t6 o, r
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
* F0 A: U9 J9 Z) W1 |/ sA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.$ h" }3 z9 o2 _0 Y* b+ H
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.
( C2 N- y1 ], `* r$ vbut the value of their assets did really drop significantly.
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4 l9 |$ F5 N/ j% l% b% u( h8 i[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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