Stochastic Models for Interest Rates

stochastic models for interest rates how to derive the bond pricing equation for many fixed-income products the structure of many popular interest rate models 360 Paul Wilmott introduces quantitative finance 16.1 INTRODUCTION Until now I have assumed that interest rates are either constant or a known function of time. The model will allow the short- term interest rate, the spot rate, to follow a random walk. The model will allow the short- term interest rate, the spot rate, to follow a random walk.