  The Heath-Jarrow-Morton (HJM) formulation of treasury bonds in terms of
forward rates is recast as a problem in path integration. The HJM-model is
generalized to the case where all the forward rates are allowed to fluctuate
independently. The resulting theory is shown to be a two-dimensional Gaussian
quantum field theory. The no arbitrage condition is obtained and a functional
integral derivation is given for the price of a futures and an options
contract.
