korkomallit
Korkomallit, often translated as "interest rate models" or "yield curve models," are mathematical frameworks used in finance to describe and predict the behavior of interest rates over time. These models are crucial for valuing fixed-income securities, managing interest rate risk, and for making investment decisions. A fundamental concept is the yield curve, which plots the interest rates of bonds with different maturities at a given point in time. Korkomallit aim to capture the shape and dynamics of this curve.
Various types of korkomallit exist, each with its own assumptions and strengths. Some of the simplest are
Applications of korkomallit extend to pricing exotic options, such as swaptions and bond options, where the