in a paper of Brennon&Schwartz (1977), they model embedded bond options by using an stochastic interest rate model which follows a geometric Brownian Motion. Now they claim that this assumption does hold when we assume that the Pure Expectation Hypothesis holds? I do not get the link to that.
Further, what are Pros & Cos of using a Geometric Browninan Motion as an Interest Rate process, in general? What are state-of-the art models which are applied nowadays?