Risk Management Of Investment Fund

The issue of risk management of investment fund is getting increasing attention in economic research.Firstly, this dissertation analyze contemperary investment theories, such as MPT, CAPM, APT, and OPT, which are all based on the hypothesis that all market participants are rational individual and the market is effective market. The above-mentioned theories develop and construct the foundation of modern financial theoretical system.Secondly, this paper explores the newly theoretical development of risk management in fund investment. The instructive significance of behavior finance lies in realizing investment objectives through employing the investment strategy aiming at irrational market behavior. Game theory is the basement to handle the interactive conflict and cooperation relationship among investment decision makers.The contemporary finance risk management theory relies highly on both quantitative and qualitative risk management techniques. Risk managers innovate new approaches of risk management through derivate products while establish a series of risk management models such as VaR.The aforementioned theories and risk management techniques explore the risk and management of investment fund from different perspectives, but none of them provides sufficient and complete explanation and analysis framework, which disclose its unique complicity.Finally, the absence of economic analysis relevant to the risk management of investment fund result in the incomplete understanding of management of investment fund.Although these theories and management techniques analyze the risk and its management of investment fund from different perspectives, a theory is missed which can provide the complete explanation framework and catch the specific complexity. A few papers focus on review for the theory innovation for theinvestment fund risk management in economic inland, the western economic mainly use inference, stress the quantitative-economic relationship on several assumptions, usually put the risk management into limited scope to study but ignore the psychology and game theory. Also, western economic framework is more and more opposed to society, history, and culture environment when economic system existing, and explore further alone. It cannot find a way to deal with the current social and economy problem. The approach within behavioral psychology and game theory get more and more attentions from the society, and show the inner necessity for social and economic development.This dissertation tries to build a complete framework for risk management of investment fund from multiple investment theories. Employed various approaches including the normative and positive approaches this dissertation explores the theory, technique, system and practice of risk management of investment fund followed the steps including positing question, analyzing question and solving question. As well as, based Chinese practice, it posits the problem within the risk and management of investment fund, analyzes the core of the risk of investment fund by technique and system perspectives, applies the conclusion above to risk management of investment fund practice in China, and posits the suggestions aimed to common and specific risks respectively.This dissertation provides some brand-new insights while absorb foreign research achievements. Based on the overseas financial theory, it describes the presentation and reasons of investment fund by explore the core of risk management, systematically evaluate and manage the risk, formulating the appropriate management institution. This is a theory innovation on investment fund risk management.This dissertation has achieved research innovation and breakthrough in the following six aspects:First of all, this dissertation studies the risk management of investment fund from systematic perspective by referred to the achievements of behavior finance theory since 1990's.Secondly, it focuses on the hot topic of risk management of investment fundoversea -derivate financial instrument, tracks the development of new theory and model, and applies it to practice as a technique and instrument. First of all, it points out the risk management technique of investment fund market based on the derivate financial instrument from both of APT. law and insurance law of portfolio. Second, it explores the credit risk for managing investment fund by employed the derivate credit skill from form of credit risk and its risk management perspectives. Additionally, the theory and skill of derivate financial instrument are applied on the presentation and measurement of investment fund market risk, four-dimensions and measurement approach of current risk as well.Thirdly, it discusses the four risk value models such as simple VaR, parameter VaR, historical simulation model and Monte carlo after summarized the VaR how to affect the portfolio of risk management of investment fund. Finally, it tries to fix the VaR model after pointing out the limitation of VaR. It attests the efficiency of VaR by employed the back and forth attestation and analyzes the absent of the VaR by pressure test and situation test. VaR model is applied complex management of investment fund and formulate it.Fourthly, based on the game theory and law-economic from institutional perspective it posit a new supervision system of investment fund which is 'four levels in one system and the combination of internal and external system' supervision system of investment fund that means four approaches work together and the outside and inside combined. It can be summed up 'four levels in one system and the combination of internal and external system' supervision system of investment fund, which means four approaches work together and the outside and inside combined. Risk management system includes from four levels: first is internal system of investment fund institution, second is monitor by the industry and SEC, third is the government supervision, and last is international cooperation supervision. They have different roles therein, the first one forms the internal control system, the later three form outside supervision system. They work together to formulate the complete risk management system.Fifthly, it presents that not only common risk but also special risk exists in Chinese security market, two working together induces the serious problem. First ofall, it posit the management strategy for common risk by reviewing the several kinds of common risks that investment fund face in China and analyzing the reasons. Second, it focuses on system risk and management that the investment fund face in China by disclosing the several system risks, analyzing the reasons that induces the system risk and positing the strategy for dealing with the system risks.Finally, this dissertation explores the issue both of building and improving internal control system from law economic. First of all, it studies the several investment fund models started from exploring the definition of organization structure from law economic. It explains the effect got from several organizations of fund such as corporation model and covenant model, as well as open model and close model on risk management. Then, it explores and summarizes the improved international risk management model of corporate governance of covenant fund from issues existing in both of corporate governance of investment fund and covenant fund.