Question: Suppose that in the risk-neutral Vasicek process a = 0.15, b = 0.025, and o = 0.012. The market price of interest rate risk is

Suppose that in the risk-neutral Vasicek process a = 0.15, b

Suppose that in the risk-neutral Vasicek process a = 0.15, b = 0.025, and o = 0.012. The market price of interest rate risk is -0.2. What are the risk-neutral and real-world processes for (a) the short rate and (b) a zero-coupon bond with a current maturity of 3 years. Suppose that in the risk-neutral Vasicek process a = 0.15, b = 0.025, and o = 0.012. The market price of interest rate risk is -0.2. What are the risk-neutral and real-world processes for (a) the short rate and (b) a zero-coupon bond with a current maturity of 3 years

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