The Design And Pricing Of A Financial Product With Promised Lowest Return

Financial derivative product designing and pricing is the most important and at the same time the most difficult problem in derivatives research. Financial product with promised lowest return is an important component of financial derivative product. Its designing and pricing has a very important significance for both issuers and investors.Compositions and design features of the financial product are analyzed first in this paper, which constitute the foundation of product pricing. Then, to the valuation principle, factors affecting pricing, pricing model and pricing method are studied in depth respectively.Pricing method of specified product is the key and difficult point. The static protection and dynamic protection product are taken as example for this study. Underlying modern option pricing theories and employing probability and the mathematical solution price the financial products. We obtain the closed-form solutions to the pricing of the financial products.This paper attempts to make a systematic research on the design of the financial product with promised lowest return. By analyzing the fundamental principles and pricing of the financial product, which referring to the current situations in china. At last in this paper, solutions were raised in the views of both the issuer and market.We carry out the empirical analysis and numerical experiments for all the above models. Empirical analysis and numerical experiments show that the models are efficient.