Which of the Following Is Assumed to Be Lognormal When

question 16

Multiple Choice

Which of the following is assumed to be lognormal when a bond option is valued?

• A) A future bond price
• B) A future swap rate
• C) A future short-term rate
• D) A future bond yield

---

Definitions:

Flow

The totally absorbing experience of engaging in an activity that is valuable for its own sake. In flow, mood is slightly elevated and time seems to pass quickly.

Awe

A feeling of reverential respect mixed with fear or wonder inspired by what is considered sublime or powerful.

Nirvana

In Buddhism, a transcendent state free from suffering and individual existence, achieved through enlightenment.

Humanistic Perspective

A psychological approach that emphasizes individual potential, self-growth, and the importance of viewing life and challenges from the person's subjective perspective.