Question: Suppose that x is the yield to maturity with continuous compounding on a zero-coupon bond that pays off $1 at time T. Assume that x

Suppose that x is the yield to maturity with continuous compounding on a zero-coupon bond that pays off $1 at time T. Assume that x follows the process:

dx = a*(x0 - x)*dt + s*x*dz,

where a, x0, and s are positive constants and dz is a Wiener process.

What is the impact of the a*(x0-x) term in the equation?

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