Design Of Financial Products Linked To Brent Crude Oil Spot Price

Since the reform and opening up,China’s economy has soared,and the increase of residents’ income and savings is leading the world.At the same time,China’s financial market is also continuously developing and improving,reflecting in various aspects such as the improvement of the transaction system,the increase of the number of financial products and the upgrading of kinds,people’s financial awareness is also constantly enhancing.Although China,with its superior socialist system and strong national cohesion and other reasons,makes the land of China peaceful and people live and work in peace and contentment,the outside world is in continuous war and the situation is unstable,and the energy crisis caused by the Russia-Ukraine conflict affects the world.At the same time,after the great test of the epidemic,people need more ways to manage their wealth to hedge unknown risks.In this context,this paper decides to design a type of structured financial product that can hedge against rising oil prices by combining the current economic environment and social status.Based on the existing research,this paper designs a class of financial products with Brent crude oil as the target.Firstly,this paper collects a large number of literatures and studies relevant literatures,so as to understand the design process,structure composition and other matters needing attention of structured financial products.On the basis of existing research and combined with the actual situation,further innovation is made,that is,to design a class of financial products with different risk levels for people with different risk preferences.In this paper,financial products with risk levels of R2 and R3 are designed respectively,so as to meet the investment needs of risk-averse(or risk-neutral)people and risk-averse people at the same time.Rather than just designing a risk-specific wealth management product.Then,the relevant theories required for the study of this financial product are introduced in detail,including asset portfolio theory,option pricing theory and utility theory,etc.,which provide theoretical support for the design of this financial product.Then the design scheme of the product is expanded,including the analysis of supply and demand of the product,structural design,product design elements and the preparation of the product specification.In terms of the design structure,the embedded option selected in this paper is the shark-fin option,and the fixed income part is the accounting discounted national debt.In the pricing part of the product,Monte Carlo simulation analysis method and discounted cash flow method are used to simulate the future asset price path and pricing the option part.Meanwhile,discounted cash flow method is used to calculate the value of the fixed income part of the financial product.Finally,the actual value of the financial product is slightly higher than the issue price.The part that is issued at a discount and the price is higher belongs to the reasonable range,which preliminarily proves the rationality of the product design.In the part of risk analysis,the possible influence of underlying asset volatility,participation rate and other factors on product return rate is discussed respectively and sensitivity analysis is carried out.At the same time,market risks faced by financial products are analyzed and managed.Finally,the marketing strategy of the financial product is proposed and guided,and the marketing concept is innovated.