Pricing And Risk Analysis Of Stock Index Structured Financial Products

The process of marketization of interest rates in China has accelerated as China’s accession to the WTO and the opening up of financial markets have increased.In addition,Chinese households’ savings have rapidly risen.Meanwhile,domestic banks can keep deposits in banks by issuing wealth management products to avoid reducing their market shares,therefore,the problems caused by the continuous expansion of investment demand,followed by the common needs of both sides to make structural wealth management products have sufficient room for development.The variety of financial products on the market and the frequent occurrence of loss events have caused a large number of non-professional investors to fail to fully analyze the value and risks of this type of wealth management products,and this has led to these non-professional investors being unable to choose the most suitable products for themselves.In view of this,this article chooses the pricing and risk analysis of the"Huixiang Tianxia",a 2-year structured wealth management product issued by HSBC in 2016 as the research content and analyzes its pricing principle and implementation process.It helps non-professional investors to realize how to invest this kind of structured financial products and analyze or evaluate its risk.This article first combs and analyzes the predecessors’ research on the pricing and risk of structured financial products,thus confirming the writing framework of the article.And select the latest market data to describe the current development of China’s wealth management product market,in the classification of these overwhelming financial products,the introduction of the complexity of this classification standard and so on.Next,we will conduct a pricing analysis on the selected HSBC Bank’s "Huixiang Tianxia " financial products.This is mainly the use of geometric Brownian motion and Monte Carlo simulation method to simulate the price of the product,and then pricing it.This paper selects the sensitivity analysis of market risk of structured financial products,selects different risk factors,summarizes the sensitivity characteristics of product risk factors,and conducts investment structured financial products at both investors and issuance banks.Risk metrics,risk management and investment strategies provide a reference.Finally,the article summarizes some problems existing in the current market of financial products in our country,and puts forward some suggestions for improvement.It also explains some shortcomings and innovative parts of the article.