Information Asymmetry And Risk Management Of Bond Yield

Compared to the investment of securities, national debt is safer, more profitable and flexible. The investment on national debt is more and more fashionable. But in recent years, money market has come forth plenty of derivatives with the development of technology improvement and financial innovation. Those derivatives have made basic and structural change, it makes money market more and more fluctuant as well the higher efficiency. Information asymmetry in the market of domestic national debt results in much higher risk on the investment of public debt.In abroad it is much better than in domestic on information asymmetry. There are many researches on information asymmetry of domestic securities, while few papers on national debt from the point of informatics. Under the guidance of teacher Wen, make sure the paper theme: information asymmetry and management of debt risk.During the process of preparing, the main difficulties are data collecting, transacting and utilizing. Under the direction of Pro. Hu of Xiangcai Securites, it is much easier to collect and utilize data. It cost me nearly 2 months to transact data and build a simple and convincible model of risk control.The structure of this paper is organized as follows. In the first chapter the paper introduces the relative theories of information asymmetry and risk management of bond yield. In the second chapter, by positively analyzing of relativity between Chinese bond yield with prime interest and money market, the fundamental analysis of information asymmetry of Chinese bond market is made.In the third and forth chapters the paper analyses the relevance between bond yield and prime interest in USA and Japan. The paper also makes a fundamental analysis of information asymmetry in USA and Japan.During the last chapter the paper outlines the meaning of analysis of bond yield, makes comprehensive analysis of information asymmetry among China, USA and Japan and compares the transparent degree of bond markets of the three markets. The models of forecast bond yield and bond yield risk management are established. Finally the paper discusses about how to use the model to make quantitative analysis, and how to reduce the risk of information asymmetry, so as to make a good management on bond yield.There are mainly four points of innovation in my paper. The first is that the paper comes forth conclusion of the degree of information asymmetry in Chinese national debt market. The second is I ascertain some information indexes to describe the trend of debt yield, it change the qualitative analysis into quantitative analysis. The third is that it build a model of bond yield forecast and the forth is to build a model of bond yield risk management, it helps to control the risk and improve the yield.There will be certainly some shortcomings in the paper, and also some aspects need to be research further. The first is data lacking, under the restriction of development history, the paper only collected data since 1998. Secondly it has not made a positively analyzing on such indexes as CPI, GDP and so on. The third is the model will be out of effect in the case of policy change suddenly.