The Ho-Lee model assumes that the short rate has stochastic differential equation dr t = (t)dt

The Ho-Lee model assumes that the short rate has stochastic differential equation dr_t = θ (t)dt + crdW_t. Note that the money market account is defined via B_T = e∫₀^T rudu and the discount bond is related to the short rate via D(t,T) =  Further, let ƒ_t,T be the instantaneous forward rate applicable for time T as seen at time t, and defined via D(t,T)The instantaneous forward rate can be related to the short rate via r_t = ƒt,t. Based on the formula in Section 2.1.1 and assuming the Libor rate L_T can be approximated via the instantaneous forward rate ƒ_T,T as seen at time T, determine the futures convexity adjustment based on the Ho-Lee model. (We will discuss short rate models in Chapter 8. If you feel there is too much new material, it might be worth waiting until you have read Chapter 8 before attempting this. The reason for discussing it here is that the Ho-Lee model is a very popular model used for obtaining the futures convexity adjustment in practice.) 

Section 2.1.1

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EP[e-Str.ds].