Risk Of Financial Management Products

With the stable domestic economic development and the Chinese people’s income increasing continually,the investors’awareness of financial management has takem shape. So there is a great demand for diversity of investment channels. On the other hand, the impact of financial crisis is still on, while the European Debt Crises is intensifying. The ontinuous turbulences in the international economic environment intensified the downturn of the domestic capital market. Besides, after a rapid growth, the real estate market in China is now under strong regulation of the government and begin to fall in2011.What’s more, people are facing the pressure of wealth shrinking with the high inflation rate in China. Considering all the elements mentioned above, people seek to get a stable income from their assets actively. Additionally, commercial banks have an incentive to develop intermediary businesses with the maturity of innovation both in concept and technology. Against this background, financial management products market experienced a rapid development in recent years which reached a new record in the first half of2011with both the number and size issued exceeded the whole scale of2010.However,. a range of issues revealed in domestic financial management market, such as the gap between real return rate and expected return rate announced by issuing bank, inadequate risk disclosure, investors’ confusion when choosing financial products, etc. This essay firstly summarized the development of China’s financial management market and its risk status, and then analyzed the pricing of a typical product with the Monte Carlo method as an example of showing how to view the expected return rate before buying a financial product. At last, we discussed how to cope with the risks involved from perspectives of different participants.