I am looking for a nice and readable description of how to implement BDT model: $d log(r(t)) = [\theta(t)-\frac{\sigma'(t)}{\sigma(t)}log(r(t))]dt + \sigma(t) dW$.
I assume I already have steady-state IR curve $r^*(t)$ and volatility curve $\sigma^*(t)$.
It makes no difference whether it would be binomial tree or Monte-Carlo or FDM implementation. Monte-Carlo seems to be easy but I'm not sure whether I can use $\theta(t) = r^*(t)$ and $\sigma(t)=\sigma^*(t)$.
I went thru Derman's article and Haug's "Options pricing formulas" but found no answer.