You ﬁnd that the Black-Derman-Toy model predicts a rise in the short rate for both the next up period and the next down period. Given this information you decide to short Treasuries, since a future rise in interest rates will bring bond prices down. Is this right?

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The Answer of You ﬁnd that the Black-Derman-Toy model predicts a rise in the short rate for both the next up period and the next down period. Given this information you decide to short Treasuries, since a future rise in interest rates will bring bond prices down. Is this right?

You ﬁNd That the Black-Derman-Toy Model Predicts a Rise in the Short