In the Ho & Lee (1986)model,the parameter $\delta$ plays a crucial role.Which of the following statements best describes this parameter? A) $\delta 1$ ) B)As $\delta$ Increases the volatility of interest rates increases. C)As $\delta$ Increases the volatility of interest rates decreases. D) $\delta

Question

In the Ho & Lee (1986)model,the parameter $\delta$ plays a crucial role.Which of the following statements best describes this parameter?
A) $\delta > 1$
)
B)As $\delta$
Increases the volatility of interest rates increases.
C)As $\delta$
Increases the volatility of interest rates decreases.
D) $\delta < 0$
)

Quizplus · Accepted Answer

The Answer is C

In the Ho & Lee (1986)model,the Parameter δ\deltaδ Plays a Crucial Role

In the Ho & Lee (1986)model,the Parameter $\delta$ Plays a Crucial Role