Statistical Measures 

Statistics helps in measuring the behavior of a set of data. It computes a typical value or how widely the data is distributed. Two major measures used are Measures of Central Tendency and Measures of Dispersion.      

Quantitative data, organized or unorganized, show a common characteristic to concentrate at certain values usually somewhere in the center of the distribution. The various measures that are employed to measure this phenomenon are called Measures of Central Tendency.

Heath, Jarrow and Morton Model (HJM Model)  

The term structure can also be modelled using more factors; a two-factor model uses two rate processes, one for short-term rates and the other for long-term rates. The Heath-Jarrow-Morton model is an example of a derivative pricing model that uses a two-factor term structure model. Heath, Jarrow and Morton were the first to point out the link between the drift and standard deviation of an instantaneous forward rate.
                       
This model specifies process for entire term structure by including an equation for each forward rate. There are very few restrictions on term structure movements. If the volatility is constant in the above equation HJM model resembles Ho-Lee model. Drift and volatility can have many forms.

Unfortunately, involving instantaneous forward rates is difficult to manage as these are not directly observable in the market. An alternative model, proposed by Brace, Gatarek and Musiela overcomes this problem. It is known as the LIBOR market model or the BGM model. It is expressed in term of the forward rates that trade’s are used to working with and is constructed so that it is automatically consistent with direct market observable cap prices.