What Is Assumed to Be Lognormal in the Standard Market

question 1

Short Answer

What is assumed to be lognormal in the standard market model for valuing the following?
i) A bond option _ _ _ _ _ _ _
ii) A caplet _ _ _ _ _ _
iii) A swaption _ _ _ _ _ _

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Definitions:

Drawing Account

An account that tracks amounts withdrawn from a business by its owners for personal use, which reduces the owner's equity.

Capital Account

An account on a nation's balance of payments that records all transactions related to asset changes, including investments and loans.

Liabilities

Financial obligations or debts owed by a business to outsiders, which are required to be settled in the future.

Drawing

A withdrawal made by an owner from the business for personal use.