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:

Perception

The process of organizing, identifying, and interpreting sensory information in order to represent and understand the environment or an object.

Lay Epistemology

The study of how ordinary people form beliefs, judgments, and knowledge about the world.

Perception

The process of organizing and interpreting sensory information to give it meaning.

Decision

The act of making a choice among available alternatives.