Answer: The Ho-Lee model

**Explanation:** - **Option A (Vasicek model)**: This is an equilibrium model that assumes mean reversion in interest rates, but it is not arbitrage-free by construction. - **Option B (Ho-Lee model)**: This is an arbitrage-free model that uses a binomial lattice approach. It was one of the first no-arbitrage models and is designed to fit the current term structure exactly. - **Option C (Cox-Ingersoll-Ross model)**: This is another equilibrium model that incorporates mean reversion and ensures non-negative interest rates, but it is not specifically a binomial lattice model and is not arbitrage-free.

Author: LeetQuiz Editorial Team