Pricing Structure Financial Products of Commercial Banks in China

Based on the classification of the underlying assets, the structure financial products of commercial banks in China can be divided into four categories, i.e. stock, commodity, interest rate and foreign currency financial products. This paper establishes models for each category of the four underlying assets and uses them to price the corresponding structure financial products of commercial banks in China. The empirical result of this paper finds that most all of the structure financial products of commercial banks in China is overvalued, and the premium degree of products have a significant relationship with product complexity, mark and issuer properties.