Why Interest Rate Derivatives are 22.3 Much more difficult to value than Stock Options Volatilities of different points on the term structure are different nterest rates are used for discounting as well as for defining the payoff Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 22.3 Why Interest Rate Derivatives are Much More Difficult to Value Than Stock Options • Volatilities of different points on the term structure are different • Interest rates are used for discounting as well as for defining the payoff