Design And Analysis Of The Rating System Of Money Market Fund In China

Money market funds is a part of investment funds, and plays a more and moreinportant role in the market of funds. As known that the rating system of moneymarket funds is not so much perfect at all, and recearch goes not far. This paperfocuses on the rating system of MMF, selects suitable quotas, with the help of FDM,the pupose is to design a relatively perfect rating system of MMF, to offer some helpabout the investment decision.This article is devided into two sections, every section does a kind of research.Section one is about the rating system of MMF. The first chapter describes the ratingmethod of Moody’s and Fitch about MMF. And takes analysis of the two ratingmethod’s framework and all the quotas, including each quota’s meaning andcalculation method. For example, the Moody’s mainly focuses on two parts,one isthe credit condition of the MMF,the other is the stability condition. Though theframework of Fitch is not the same, Fitch focuses on the risk of MMF,includingcredit risk, liquidity risk and market risk. The second chapter introduces themothodology of FDM at large. The third chapter selects the most suitable quotasusing FDM, and calculates every quota’s weight by the matlab. Finally we selects10money market funds from the market, rating them using the rating system we design.Section two is about the ralationship between maturity of MMF and a series offactors,such as interest and capital scale. Localize the model of CTEMM, makes itmore fit to our coutry’s market. The maturity decision reflects the manager’s time ability.It is the key to investment.The empirical research informs that the interestmakes the most strong effect on the maturity decision.When the manager take aexpectation of rising interest,he will lengthen the maturity,or a expectation ofdecreasing interest,he will shorten it.The rating system designed reflects my ideas on the MMF topic. The result maybe different from the exsisting rating system,i think this is kind of a slowly perfectstep by step.I hope that this research may do some little help.