I basically totally don't understand what it is talking about the number of terms in the drift summation under Q^10 measure before and after using the spot-LIBOR-measure.
How is the number counted? E.g., what are the seven drift terms for F_3 and why it's zero for F_10?
And why the case changed when the spot-LIBOR-measure is used?
And what does this mean? "some rates will be more biased than others" and "the possible bias coming from the discretized drift". Where is the bias from?
Can anyone help? Thanks a lot!
How is the number counted? E.g., what are the seven drift terms for F_3 and why it's zero for F_10?
And why the case changed when the spot-LIBOR-measure is used?
And what does this mean? "some rates will be more biased than others" and "the possible bias coming from the discretized drift". Where is the bias from?
Can anyone help? Thanks a lot!
IRM Chapter 6 proposition 6.3.3 (p219-220)
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