Risky forward interest rates and swaptions: Quantum finance model and empirical results

Both the US forward interest rates and the term structure for the spread are modeled by a two dimensional Euclidean quantum field. As a precursor to the evaluation of put option of the Singapore coupon bond, the quantum finance model for swaptions is tested using empirical study of swaptions for the US Dollar -showing that the model is quite accurate. A prediction for the market price of the put option for the Singapore coupon bonds is obtained. The quantum finance model is generalized to study the Malaysian case and the Malaysian forward interest rates are shown to have anomalies absent for the US and Singapore case. The model's prediction for a Malaysian interest rate swap is obtained.