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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.& A) R. V( ~( F* y0 }: P- X
CDs could have different ratings, AAA -> F,
; d% H x( _2 Q& \+ Jmore risky ones would have higher premium (interest rate) as a compensation for an investment.
6 M$ x' {: |' U6 U1 lmain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,0 V3 h' J2 [' R5 D
in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
; }2 Q2 D1 N0 t9 p- _( o4 NAlso, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
# R6 E) r) a* Z$ {+ esimilar to bonds, CDs trading in the secondary market have different value at different times,
) p: N- K! R0 J6 `& Y" bnormally the value is calculated by adding it's principle and interest. # `- x6 g1 Z( s1 c' g; n1 v
eg. the value of the mortgage+the interests to be recieved in the future.
7 Q, N- C, ~. s7 z1 Gbanks 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.
9 G4 ^, F- N8 c5 h$ j, Z- c3 }$ v5 T) y4 g* d C/ R
im not quite sure if the multiplier effect does really matter in this case.
. X, ]( D& S4 c* M' [* C+ Vin stock market, it's the demand and supply pushing the price up/downwards.
( C9 J; S1 V- e: O! w, ?. o8 iFor eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12," P3 I' N* U D8 b) a$ H* E
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
$ g& g( W* T5 L7 }- K' Q/ a* DThe 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.
8 b( Q% o" a) K- W" mbut the value of their assets did really drop significantly.
% i1 r% a& u( a0 G
: ]& E& V6 ]! V5 j: X$ L6 j[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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