7. Consider the CIR (Cox-Ingersoll-Ross) model dr 5 2 rdt 1 OrdW t Plot the term...

7. Consider the “CIR (Cox-Ingersoll-Ross)” model dr 5 αðμ 2 rÞdt 1 σOrdW t Plot the term structure (i.e., plot yield versus time) for the following parameter sets [α,μ,σ,r(0)]:

½0:02; 0:7; 0:02; 0:1

½0:7; 0:1; 0:3; 0:2

½0:06; 0:09; 0:5; 0:02

Now for the third parameter set, plot the term structure by varying only one parameter at a time and report your observation