Affine term structure model

ID: affine-term-structure-model

An Affine Term Structure Model (ATSM) is a class of models used in finance to describe the evolution of interest rates over time. The term structure of interest rates refers to the relationship between interest rates (or bond yields) and different maturities. The term "affine" refers to the mathematical form of the model, where the relationship is linear in parameters, making the analysis and computation more tractable.

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