This is a mathematically derived formula that is used for pricing interest rate options. This formula is based on the idea that the movement of short term interest rates follow a pattern equal to a square root diffusion model with mean reversion. This formula does not allow for negative interest rates.

Previous Terms: 1031 Exchange, 1035 Exchange, AARP, Abeyance, Abstraction Principle, Accelerated Amortization, Acceptance Credit, Acceptance of a Bill of Exchange, Accommodation Bill, Accommodation Endorser