In the Cubic Splines Technique,which of the Following Is a Benefit

question 7

Multiple Choice

In the cubic splines technique,which of the following is a benefit of adding more knot points to the algorithm?

• A)It enhances the smoothness of the forward curve obtained from the fitted function.
• B)It makes implementation easier as the number of parameters increases.
• C)It increases flexibility in being able to fit a greater variety of shapes for the discount function.
• D)It enables fitting the curve to more bonds and allows incorporating illiquid bonds as well.

---

Definitions:

Intrinsic Rewards

Rewards that are internally motivated, such as personal satisfaction or joy from performing a task.

Pleasure

A feeling of happiness or satisfaction derived from experiencing something enjoyable or satisfying.

Garcia Effect

A phenomenon in which an aversion or distaste for a particular taste or smell is acquired after sickness or nausea is associated with that specific taste or smell.

Conditioned Aversions

A learned aversion to a substance or activity after it has been associated with an unpleasant or harmful stimulus.