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

Suppose that in a risk-neutral world the Vasicek parameters are a=0.15, b = 0.025, and σ =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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