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Is this possible?
I calibrated the Black-Karasinski model to LIBOR curve and swaption volatilities observed on market, generated 200 paths, and calculated 10 year par rates for each path starting a month from now. Then I graphed the distribution of the 10 year LIBOR rates one month from now, and it showed a standard deviation of nearly 2%. But historical 10 Yr Libor rates series from 2003 to 2008 showed only a 0.4% standard deviation. I wonder why the long rates that I calculated from the paths showed such a big variance in just a month time? Thanks for any feedback!Tau