Term Structure Models
The paper is an overview from scratch of the term structure modeling field. We present a brief review of the problem of modeling the term structure of interest rates. We start with informal problem formulation, and then, via different formalizations, we arrive at several different term structure models. We propose a new classification of term structure models based on the nature of a priori assumptions employed. We also illustrate the difference between snapshot and dynamic models, present arguments in favor of and against the approaches discussed and also point out some difficulties arising while using and combining such methods.