Financial Risk Manager Part 2
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Ultimate access to all questions.
Which of the following statements best characterizes the differences between the Ho-Lee model with drift and the lognormal model with drift?
A
In the Ho-Lee model and the lognormal model the drift terms are multiplicative.
B
In the Ho-Lee model and the lognormal model the drift terms are additive
C
In the Ho-Lee model the drift terms are multiplicative, but in the lognormal model the drift terms are additive
D
In the Ho-Lee model the drift terms are additive, but in the lognormal model the drift terms are multiplicative.