You are given the following interest rate tree. Use it when required in the
exercises.
-What advantage does the Black-Derman-Toy model have over the Ho-Lee model, when comparing the plausibility of the modeled interest rates?

Question

You are given the following interest rate tree. Use it when required in the
exercises. 
-What advantage does the Black-Derman-Toy model have over the Ho-Lee model, when comparing the plausibility of the modeled interest rates?

Quizplus · Accepted Answer

The Answer of You are given the following interest rate tree. Use it when required in the
exercises. 
-What advantage does the Black-Derman-Toy model have over the Ho-Lee model, when comparing the plausibility of the modeled interest rates?

You Are Given the Following Interest Rate Tree