CFA Practice Question

There are 147 practice questions for this study session.

CFA Practice Question

Which model does not try to explain the observed yield curve?

A. The CIR model
B. The Vasicek model
C. The Ho-Lee model
Correct Answer: C

It takes the yield curve as given and correct.

The argument for fitting models to market prices is that a good deal of information about the future behavior of interest rates is incorporated into market prices, and, therefore, a model fitted to those prices captures that interest rate behavior.

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