Chapter 5 — Risk Aversion and Investment Decisions, Part 1
Missing minus signs in the Arrow–Pratt measures
Location: p. 126
Error:
Absolute risk aversion:
\[
\frac{U”(Y)}{U'(Y)} = R_A
\]
Relative risk aversion:
\[
\frac{Y U”(Y)}{U'(Y)} = R_R
\]
Chapter 6 — Risk Aversion and Investment Decisions, Part 2
Error in Equation (6.19)
Location: p. 185
Error:
\[
a^* = \frac{\mu Y_0(1+r_f)}{\gamma(\sigma^2 + (1+\eta)\sigma_0^2)}
\]
Correction:
\[
a^* = \frac{\mu – r_f}{\nu(\sigma^2 + (1+\eta)\sigma_0^2)}
\]