NO.PZ201701230200000303
问题如下：
3. Is Madison correct in describing key differences in equilibrium and arbitrage-free models as they relate to the number of parameters and model accuracy?
选项：
A. Yes
B. No, she is incorrect about which type of model requires fewer parameter estimates
C. No, she is incorrect about which type of model is more precise at modeling market yield curves
解释：
A is correct.
Consistent with Madison’s statement, equilibrium term structure models require fewer parameters to be estimated relative to arbitrage-free models, and arbitrage-free models allow for time-varying parameters. Consequently, arbitrage-free models can model the market yield curve more precisely than equilibrium models.
Equilibrium model中不是有dt么，这不也表示跟时间相关么，不也应该是vary with time么
