The Design Of Minimum Interest-Protected Bond-Linked Structured Financial Product

Structured financial products were first born in the United States in the 1850 s,and became popular in the financial markets of developed countries such as Europe and Asia in the 1990 s.In the early 21 st century,structured financial products gradually emerged in China.The scale and system of the market have been relatively mature now,but there are still some problems remaining in the products,such as homogeneity and unreasonable pricing.From the perspective of providing innovative ideas,this paper designed a minimum interest-protected bond-linked structured financial product that can provide stable interest and higher potential returns for investors on the premise of guaranteeing a certain percentage of principal.The minimum interest-protected bond-linked structured financial product is a special kind of stock-linked financial product that can be divided into two parts: coupon bond and option.The risk and return of the option are linked with the worst performer.First of all,this paper summarized the research of structural financial products by scholars at home and abroad in recent years,and divided it into two parts: product designing and product pricing.It was considered that the design of products that can meet the needs of investors is theoretical and practical meaningful.Then,the design of the product was determined.After analyzing the requirement,the basic parameters of the product were determined according to the principle,besides,the targets and description were introduced.In addition,it fixed price for the product.The intrinsic value of the product was obtained by using the martingale pricing method and the result showed that the product is reasonably priced.Finally,it analyzed the product's risk,earning and characteristics.It was found that this product has the advantages of broadening investment channels,high potential return,innovation,breaking rigid payment,etc.At the same time,it also has the disadvantages of large fluctuation of return,high starting point and high requirements on investors.Theoretically speaking,there are few literatures and innovations on design of structural products,so the design of the minimum interest-protected bond-linked structured financial product in this paper can fill the theoretical gap.As for the practical aspect,China's financialmarket will gradually transform into a market with innovation as the core of the issuers in the future.This paper can provide innovative ideas for the design of structured products,in order to help solve the problem of homogeneity.In addition,with the proposal of the new regulations on asset management,breaking the rigid payment will be the development trend of our financial market.This product,as a non-guaranteed floating income product,proposes new design concepts and directions for each issuer.