| Three decades of reform and opening up, China's economy has maintained rapid growth, people enjoy rising incomes, growing wealth. More and more wealthy Chinese families for wealth preservation, value-added demand has become more urgent. But our current financial markets are underdeveloped, few investment channels can be found, unable to meet the diversified needs of investment and financial management of different families. In this case, commercial banks have introduced a new way of managing money - structured financial products. Structured financial product are combination of fixed-income securities and derivatives, derivative contracts generally choose options, most commonly used underlying assets include interest rates, exchange rates, equities, and commodities. With their advantages of diverse portfolio, risk control and higher rate of return,they becomes many families'financial choice.Although since its inception, structured financial product has been received by so many investors, and the market has developed rapidly. The 2008 outbreak of structured finance products massive "zero income" "negative returns" incident has exposed the great problems on products'quality and regulation. Therefore, this article will do research on two core aspects: quality test and regulation system of structured financial products.In this paper, we start from the introduction of structured financial products'concept, types and designing process, focusing on their pricing. After that, from the perspective of the probability distribution, we assess the quality of products by using returns indicators and risk indicators. Then we use Monte Carlo simulation method to make empirical tests on two structured financial products, and analyse their income distributions and the risk return characteristics respectively. Finally, try to establish a sound and effective structured financial products'regulation system, so as to protect investors and maintain market health and prosperity. |
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