In the context of interest rate models, understanding the nature of short-term and long-term interest rates is crucial for pricing fixed income securities accurately.
Consider the Vasicek model, a popular one-factor interest rate model. The model is used to describe the evolution of interest rates over time. Specifically, the Vasicek model assumes that the short rate follows a mean-reverting process. The parameters involved include the long-term mean interest rate, the speed of mean reversion, and the volatility of the interest rate.
Given this context, which of the following statements correctly describes a characteristic implication of the Vasicek model?