In mathematical finance, the Cox–Ingersoll–Ross (CIR) model describes the evolution of interest rates. It is a type of "one factor model" (short-rate model) as it describes interest rate movements as driven by only one source of market risk.
The Cox–Ingersoll–Ross (CIR) model in mathematical finance illustrates how interest rates change over time. This model operates under the category of "one-factor models," or short-rate models, since it attributes interest rate variations to a single market risk factor.