Explanation:

• Option A (Vasicek model): This model assumes constant volatility for the short rate, meaning the volatility parameter does not change over time.

• Option B (Ho-Lee model): This model also assumes constant volatility for the short rate in its basic formulation.

• Option C (Cox-Ingersoll-Ross model): This model includes varying short-rate volatility where the volatility is proportional to the square root of the interest rate level (σ√r). This means volatility increases with higher interest rates and decreases with lower interest rates, making it more realistic than constant volatility models.