DEFINITION of 'HeathJarrowMorton Model  HJM Model'
A model that applies forward rates to an existing term structure of interest rates to determine appropriate prices for securities that are sensitive to changes in interest rates.INVESTOPEDIA EXPLAINS 'HeathJarrowMorton Model  HJM Model'
The HJM model is very theoretical and is used at the most advanced levels of financial analysis. It is used mainly by arbitrageurs seeking arbitrage opportunities.RELATED TERMS

Term Structure Of Interest Rates
The relationship between interest rates or bond yields and different ... 
Jarrow Turnbull Model
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Arbitrage
The simultaneous purchase and sale of an asset in order to profit ... 
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RELATED FAQS

How does arbitrage affect the price of exchange traded funds (ETFs)?
Arbitrage may be used to bring the market value of an exchangetraded fund (ETF) back into line with the net asset value ... Read Full Answer >> 
How does the market share of a few companies affect the HerfindahlHirschman Index ...
In economics and commercial law, the HerfindahlHirschman Index (HHI) is a widely used measure that indicates the amount ... Read Full Answer >> 
What does the rule of 70 indicate about a country's future economic growth?
The rule of 70 could be used to indicate the approximate number of years that it would take a company's economic growth to ... Read Full Answer >> 
How is the rule of 70 related to the growth rate of a variable?
The rule of 70 is related to the growth rate of a variable because it uses the growth rate in its approximation of the number ... Read Full Answer >> 
What are the benefits of using ceteris paribus assumptions in economics?
Most, though not all, economists rely on ceteris paribus conditions to build and test economic models. The reason they do ... Read Full Answer >> 
What is the difference between the rule of 70 and the rule of 72?
The rule of 70 and the rule of 72 give rough estimates of the number of years it would take for a certain variable to double. ... Read Full Answer >>
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