Enumeration on proposed financial regulatory framework In Chapter 4, the proposed financial regulatory framework is shaped. The importance of quantitative tools and how to set them have been explained. In order to compare the outcomes from different portfolios, a pension model is constructed in Chapter 5. The accumulated assets in the rural pension funds are from the contributions and the investment proceeds. In this chapter, data about returns of assets as input in the pension model will be derived from the China’s financial market so as to calculate the risks and performances of a certain portfolio grounded on the given criteria. Data description and its processing will be discussed first. Later, the outputs of the pension model will be presented by means of histogram and statistical graphs, outlining final income distribution. Ultimately, information is assembled and summarized in tables. The purpose of using data is to explain how to use the recommended financial regulation framework. 6.1. Data There are three assets classes: Chinese one-year bank deposit (Cash), China 10Y government bond (Bond), and aggregated quarterly market return from aggregate A share traded in both Shanghai Exchange and Shenzhen Exchange (Stock). For each asset, there are 58 observations indicating quarterly returns from 1996 to 2011. The reasons why dealing with quarterly returns are for stocks it will generate huge deviation if annualizing monthly data or quarterly data. Information about bonds is obtained from Wind Info. Information about stocks is from GTA Information Technology Company. Information about Chinese interest rate is from the DataStream database. Historical information about the yield of China’s government bond is limited back to 1996, where the time frame of data in this thesis is trimmed. Foreign data is considered to be too risky to be incorporated after adjusted to the exchange rate. Data Description
Enumeration on proposed financial regulatory framework In Chapter 4, the proposed financial regulatory framework is shaped. The importance of quantitative tools and how to set them have been explained. In order to compare the outcomes from different portfolios, a pension model is constructed in Chapter 5. The accumulated assets in the rural pension funds are from the contributions and the investment proceeds. In this chapter, data about returns of assets as input in the pension model will be derived from the China’s financial market so as to calculate the risks and performances of a certain portfolio grounded on the given criteria. Data description and its processing will be discussed first. Later, the outputs of the pension model will be presented by means of histogram and statistical graphs, outlining final income distribution. Ultimately, information is assembled and summarized in tables. The purpose of using data is to explain how to use the recommended financial regulation framework. 6.1. Data There are three assets classes: Chinese one-year bank deposit (Cash), China 10Y government bond (Bond), and aggregated quarterly market return from aggregate A share traded in both Shanghai Exchange and Shenzhen Exchange (Stock). For each asset, there are 58 observations indicating quarterly returns from 1996 to 2011. The reasons why dealing with quarterly returns are for stocks it will generate huge deviation if annualizing monthly data or quarterly data. Information about bonds is obtained from Wind Info. Information about stocks is from GTA Information Technology Company. Information about Chinese interest rate is from the DataStream database. Historical information about the yield of China’s government bond is limited back to 1996, where the time frame of data in this thesis is trimmed. Foreign data is considered to be too risky to be incorporated after adjusted to the exchange rate. Data Description
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