Risk Assessment Of Equity-linked Financial Products

Equity-linked financial products is one kind of Structured financial products, it means that the profit of financial products is directly related with the price of single or multiple stocks, or directly linked to a stock price index. This kind of financial products first originated in United States in the1980s, and entered the Chinese market until2005. As a new type of financial products, it is sought after by banks and investors. However in the process of development, the complex design and incomplete information disclosure have caused many phenomena of zero or even negative income. And then the risk of Equity-linked financial products has been introduced into the people’s attention.Many previous articles mainly introduce the risk of Equity-linked financial products in theory, and less articles are on risk quantitative assessment. In this paper, we start from the internal and external factors affecting the risk of Equity-linked financial products, and we lead the concepts of Degree of membership from Fuzzy mathematics and gray from gray mathematics to the risk management of Equity-linked-financial products. We use a integrated fuzzy approach to carry on the overall risk assessment of Equity-linked financial products. Besides, we conduct the empirical analysis by the introduction of an Equity-linked financial product from Hang Seng Bank. By doing these, we discuss the effectiveness of the risk assessment in Equity-linked financial products by integrated fuzzy approach.We divide this paper into six parts to introduce the risk of Equity-linked financial products. The first chapter introduces the background and significance of the study, as well as ideas and innovation. The second chapter is a literature review, it introduces some articles for reference in the risk of Equity-linked financial products. The third chapter is a brief introduction of integrated fuzzy approach from several concepts. The forth chapter is the overall risk assessment of Equity-linked financial products basing on integrated fuzzy approach. In the fifth chapter, we select an Equity-linked financial product and make the empirical analysis of the risk of this type of financial product using integrated fuzzy approach. The sixth chapter is the final conclusion and somewhere need to improve.