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In the CIR (1985)model,which of the Following Statements Is True rtr _ { t }

Question 15

Multiple Choice

In the CIR (1985) model,which of the following statements is true? The price of the bond increases when


A) The short rate rtr _ { t }
Increases.
B) The rate of mean reversion K\boldsymbol { K }
Rises.
C) The long-run mean rate θ\theta
Increases.
D) The volatility σ\sigma
Increases.

Correct Answer:

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