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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 p- b( E* }& x, q7 m+ |+ a; k- E4 LCDs could have different ratings, AAA -> F,
) \1 u4 a# s8 ]7 B4 @+ Jmore risky ones would have higher premium (interest rate) as a compensation for an investment.
( M: i/ W3 m0 T5 ]: F2 Imain reason why ppl buy those risky CDs is because the rate of return exceeds their internal rate of return,
) v; b+ B& `* t2 s( o1 Min other words, the interest rate of that investment > their required interest rate, therefore they invest in those securities.
' ?( m, j9 \; U( _Also, fund managers would include risky assets in their portfolio for different purposes, eg efficiency.
6 V& ^5 r e. m* g0 V* Jsimilar to bonds, CDs trading in the secondary market have different value at different times,; E1 T0 v; W. j( q4 _8 [ R% c
normally the value is calculated by adding it's principle and interest. 4 Y0 K; i, n7 [6 e% S
eg. the value of the mortgage+the interests to be recieved in the future.
8 _$ V5 L1 ?& 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./ z* A/ m/ U+ g* m+ Y
8 q; G/ T3 }3 x' r4 ?/ Pim not quite sure if the multiplier effect does really matter in this case.
4 r$ x6 q0 m; W& [in stock market, it's the demand and supply pushing the price up/downwards.* @6 N- j6 @- Z! d) S9 C g- `- P7 N
For eg, A bought 10000 shares @10$ ; B sells 20000 shares to C @ $12,
$ f/ G; |. _) x' G: r4 V `6 r/ L- }4 MA's shares would suddenly increase to $120000 from $100000 which does not invlove any $ transaction.
! h2 _* Z3 g3 p2 x0 s* {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.
5 R3 d& Z% t: V. n- C4 c0 abut the value of their assets did really drop significantly.
U' m* _8 H, S; v. [# F0 i ~$ m6 \) o
[ 本帖最後由 Kev 於 2008-10-8 07:26 PM 編輯 ] |
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