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CSI Short Term Note 50 Index Methodology Index code/index name Index code:H11070 Index name:CSI Short Term Note 50 Index Index shortened name:CSI Short Term Note 50 Constituents selection 1. Index Universe Bond type: Short term notes listed on Inter-bank market (include super short term notes). Corporate credit rating is AA- grade or above. The bonds currency is RMB. Outstanding: No limit at present Term to maturity: over 0.25 year Interest bearing pattern: fixed rate or bullet 2. Constituents Selection Step1 The medians of each eligible bond’s daily trading value over the data-screen period are calculated and are then ranked in a descending order. The bonds whose medians ranking out of top 50% are excluded. Step2 The rest bonds are ranked by trading value, trading days and outstanding respectively in descending order. The three ranks are then summed up to get an overall rank. The top 50 bonds are selected as index constituents. Index calculation 1. Base point Base date: 2007-12-31, Base point: 100. 2. Calculation formula Paasche weighted composite price index formula 1 The bond is weighted by its amount outstanding. Current index=[(current total bond market value +current interest and reinvestment return)/that of base date]×base point There into: total market value=∑(full price × amount outstanding). Full price=clean price + accrued interest Current interest and reinvestment return means the return that comes from the current month interest reinvesting into the bond index itself. 3. Pricing take the best market maker quote first, if unavailable, take the intraday weighted close price, if unavailable either, use the modeling price. Index Adjustment 1. Adjustment formula Divisor Adjustment Methodology. 2. Cases for Index Adjustment: Constituents adjustment Amount outstanding Adjustment— if issued amount of constituent bond changes, the index is adjusted before the change occurs. On the last trading day of the month, interest and reinvestment return is deducted from index. Index Review In principle, the constituents are reviewed and adjusted each quarter. The constituents’ adjustment is implemented on the first trading day of each January, April, July and October. In case that certain constituent is not able to satisfy the constituent’s selection criteria during the period between two consecutive periodic adjustments, CSI will deal with the case depending upon specific situation. 2