Heath-Jarrow-Morton 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 Commentary
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.
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See also: Arbitrage, Binomial Option Pricing Model, Black Box Model, Black Scholes Model, Jarrow-Turnbull Model, Term Structure of Interest Rates
Also spelled: HJM