In the context of interest rate derivatives, a short-rate model is a mathematical model that describes the future evolution of interest rates by describing the future evolution of the short rate, usually written .
Read more about Short-rate Model: The Short Rate, Particular Short-rate Models, Other Interest Rate Models
Famous quotes containing the word model:
“The playing adult steps sideward into another reality; the playing child advances forward to new stages of mastery....Child’s play is the infantile form of the human ability to deal with experience by creating model situations and to master reality by experiment and planning.”
—Erik H. Erikson (20th century)