Why Is It Considered That Implied Volatility of Interest Rate

question 15

Essay

Why is it considered that implied volatility of interest rate options has a "hump" shape?

---

Definitions:

Test Administrator

An individual who oversees the administration of tests, ensuring that testing procedures are followed and that conditions are controlled and fair.

Objective Tests

Tests designed to measure an individual's knowledge or ability in a specific area, where answers are scored without bias.

Projective Tests

Psychological assessments where individuals respond to ambiguous stimuli, revealing hidden emotions and internal conflicts.

Assessment Instruments

Assessment instruments are tools or methods used to evaluate, measure, or diagnose conditions, abilities, or characteristics in individuals.