In the CIR (1985)model,which of the Following Statements Is True $r _ { t }$

question 15

Multiple Choice

In the CIR (1985) model,which of the following statements is true? The price of the bond increases when

• A)The short rate \(r _ { t }\)
• Increases.
• B)The rate of mean reversion \(\boldsymbol { K }\)
• Rises.
• C)The long-run mean rate \(\theta\)
• Increases.
• D)The volatility \(\sigma\)
• Increases.

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Definitions:

Sleep-Inducing Hormone

Melatonin, a hormone produced by the pineal gland that regulates sleep and wakefulness.

Melatonin

A chemical substance secreted by the pineal gland in reaction to lack of light, which controls the rhythm of sleeping and waking.

Serotonin

A neurotransmitter in the brain that plays key roles in stabilizing mood, feelings of well-being, and happiness.

Norepinephrine

A neurotransmitter and hormone involved in the body's stress response and in various cognitive and emotional functions.