# Hull-White Model

Search Dictionary

## Definition of 'Hull-White Model'

The Hull-White model is a model of the short-term interest rate. It is a term structure model, which means that it describes the evolution of the yield curve over time. The model was developed by John Hull and Alan White in 1990.

The Hull-White model is a one-factor model, which means that it only uses one factor to describe the evolution of the yield curve. The factor in the Hull-White model is the short-term interest rate. The model assumes that the short-term interest rate follows a mean-reverting process. This means that the short-term interest rate will tend to return to its long-term average value.

The Hull-White model is a popular model for pricing interest rate derivatives. It is also used for hedging interest rate risk.

The Hull-White model has been criticized for being too simplistic. It does not take into account the effects of volatility and liquidity on the yield curve. However, the model is still widely used because it is relatively simple to understand and implement.

The Hull-White model is a valuable tool for understanding and pricing interest rate derivatives. It is a relatively simple model to understand and implement, and it can be used to hedge interest rate risk. However, the model is not without its limitations, and it should be used with caution.

The Hull-White model is a one-factor model, which means that it only uses one factor to describe the evolution of the yield curve. The factor in the Hull-White model is the short-term interest rate. The model assumes that the short-term interest rate follows a mean-reverting process. This means that the short-term interest rate will tend to return to its long-term average value.

The Hull-White model is a popular model for pricing interest rate derivatives. It is also used for hedging interest rate risk.

The Hull-White model has been criticized for being too simplistic. It does not take into account the effects of volatility and liquidity on the yield curve. However, the model is still widely used because it is relatively simple to understand and implement.

The Hull-White model is a valuable tool for understanding and pricing interest rate derivatives. It is a relatively simple model to understand and implement, and it can be used to hedge interest rate risk. However, the model is not without its limitations, and it should be used with caution.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.

Emini Day Trading /
Daily Notes /
Forecast /
Economic Events /
Search /
Terms and Conditions /
Disclaimer /
Books /
Online Books /
Site Map /
Contact /
Privacy Policy /
Links /
About /
Day Trading Forum /
Investment Calculators /
Pivot Point Calculator /
Market Profile Generator /
Fibonacci Calculator /
Mailing List /
Advertise Here /
Articles /
Financial Terms /
Brokers /
Software /
Holidays /
Stock Split Calendar /
Mortgage Calculator /
Donate

Copyright © 2004-2023, MyPivots. All rights reserved.

Copyright © 2004-2023, MyPivots. All rights reserved.