Q-80. John Jones, FRM, is discussing the appropriate usage of mean-reverting models relative to no-drift models, models that incorporate drift, and Ho-Lee models. Jones makes the following statements:

• Statement 1: Both Model 1 (no drift) and the Vasicek model assume parallel shifts from changes in the short-term rate.
• Statement 2: The Vasicek model assumes decreasing volatility of future short-term rates.