Question: a. In the HJM libor model, is it a simple interest rate or a continuously compounded interest rate that follows a lognormal distribution? b. Why

a. In the HJM libor model, is it a simple interest rate or a continuously compounded interest rate that follows a lognormal distribution?
b. Why is this difference important (hint: relates to Black’s formula)?
c. In the HJM libor model, is the volatility of the simple forward rate of interest a constant, or does it depend on time?

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