Explain the model of Heath, Jarrow and Morton

Explain the model of Heath, Jarrow and Morton regarding tree building or Monte Carlo simulation.

E

Expert

Verified

The model cannot simply be expressed in differential equation terms and therefore relies on either tree building or Monte Carlo simulation. The work was well identified via a working paper, but was at last published, and hence made respectable in Heath, Jarrow and Morton.

   Related Questions in Corporate Finance

  • Q : Could we explain that goodwill is equal

    Could we explain that goodwill is equal to brand value?

  • Q : Explain consensus among the chief

    Is there any consensus among the chief authors in finance concerning the market risk premium?

  • Q : What is Money Spreads Money Spreads :

    Money Spreads: Option trading strategies can be classified into various types like those pertaining to combination of one option with another option or set of options, other derivative contracts, stocks, etc. This paper focuses mainly on money spreads

  • Q : Explain few Spanish mutual funds

    Is this true that very little Spanish mutual funds outperform their benchmark? Isn’t this strange?

  • Q : Define capital goods Capital goods :

    Capital goods: Goods employed in producing other goods are termed as capital goods.

  • Q : Regarding WACC Regarding the WACC which

    Regarding the WACC which has to be applied to a project, must it be an expected return, the average historical return or an opportunity cost on similar projects?

  • Q : Finance I need the answers for the

    I need the answers for the midterm exam for FIN6000

  • Q : Explain influences of financial

    Does financial leverage (i.e. debt) have any influence on the Free Cash Flow, upon the Cash Flow to Shareholders, upon the growth of the company and upon the value of the shares?

  • Q : Zero coupon bonds problem Shana wants

    Shana wants to purchase 5-year zero coupon bonds with a face value of $1,000. Her opportunity cost is 8.5 %. Supposing annual compounding, what would be the present market price of such bonds? (Round to the closest dollar.) (a) $1,023  (b) $665  (c) $890&nbs

  • Q : Difference between capitalization and

    Is the difference for the value creation in a company among the market value of the shares (capitalization) and their book value a good measure since its foundation?

©TutorsGlobe All rights reserved 2022-2023.