Continuous Henderson (mapping approach)

The Continuous Henderson (mapping approach) is a method used in financial modeling to create a smooth, continuous representation of a market’s term structure, such as interest rates or bond prices. It transforms observable market data into a continuous function that accurately reflects the underlying trends and allows for efficient analysis and pricing of financial instruments. Essentially, it maps discrete data points into a seamless curve, helping analysts better understand how values evolve over time, and supports decisions like valuing bonds or managing risk with improved precision and consistency.