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Basic Question 3 of 7
Under the Ho-Lee model, the probability that the yield curve can move up or down at each node is called the "implied risk-neutral probability." The Ho-Lee model:
B. does not assume market professionals are risk-neutral.
C. assumes market professionals are risk-averse.
A. assumes market professionals are risk-neutral.
B. does not assume market professionals are risk-neutral.
C. assumes market professionals are risk-averse.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
describe term structure models and how they are used.
CFA® 2025 Level II Curriculum, Volume 4, Module 27.