Swap Rates in the SMM Are, Under the Risk-Neutral Forward

question 19

Multiple Choice

Swap rates in the SMM are, under the risk-neutral forward measure

• A) Normal.
• B) Lognormal.
• C) Exponential.
• D) None of the above.

---

Definitions:

Verbal Phrase

A phrase that is used to express an action or a state of being, often translated into a mathematical expression.

Algebraic Expression

A mathematical phrase that can include numbers, variables, and operation symbols, but does not contain an equal sign.

Verbal Phrase

A verbal phrase in mathematics refers to a phrase that describes an operation or relation between quantities or variables in words rather than symbols or equations.

Verbal Description

An explanation or representation of a mathematical concept or problem using words.