The Term Structure of Aduminous Cue

The atom in excuse behaves like a power low for a large range of maturities larger than one month. But it also behaves differently for maturity smaller than one. And this tells us that two parameters, so let's say the constant C and alpha in C times T to the power minus alpha, are not enough. At least a third parameter is needed to account for the behavior of the term structure for short maturities. The fit quality barely depends on whether the first monthly maturity is tomorrow or is in one month. That's the sign of a good parametric model.