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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.
6 B% J9 g+ ~+ J! i( aCDs could have different ratings, AAA -> F,
2 o7 r7 a3 z# j; C2 S3 gmore risky ones would have higher premium (interest rate) as a compensation for an investment.7 ^& p- S- V8 q+ c+ S
main reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
. W u K; d+ b% q) e; Q- F/ `in other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.! X, M! p; f) C/ u& }; r
Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
; m! e7 S: m7 B! ]& Isimilar to bonds, CDs trading in the secondary market have different value at different times,5 V. n: [. u8 R9 h+ O4 U
normally the value is calculated by adding it's principle and interest. ) J. M* Z C% s
eg. the value of the mortgage+the interests to be recieved in the future.
! j2 ~7 X4 @& 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.; h1 C3 W0 ?5 ~1 b8 F0 G* x" |( l
- j4 a) w* }6 k C4 Cim not quite sure if the multiplier effect does really matter in this case.
9 t0 \0 Z' ^$ q' c& W) din stock market, it's the demand and supply pushing the price up/downwards.
; j8 R7 i% ~$ a: ^For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,) V) K- N- t) P; k% Y7 s
A's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.; ~/ N1 C1 W7 Q0 ?( b+ b& P
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. # ]7 M! f' B8 h8 w+ O3 o
but the value of their assets did really drop significantly.
% d$ i s1 J" |9 @7 P+ ^9 a4 R }0 ]2 s$ H. V
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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