Risk Management and
Financial Institutions
The following typos
and other errors are in the first printing of the book. We have tried to
correct them in subsequent printings and so they may not be present in the copy
you have.
Page 42: In the
first line of the title to Figure 2.3 delete “per share”.(This was kindly
pointed out by Justin Schmidt.)
Page 43:
last line 0.7 should be 0.8. (This was kindly pointed out by Adam Virag)
Page 44:
Example 2.3 , line 4: change “forward price” to “forward rate” (This was kindly
pointed out by Emilio Barone)
Page 117:
footnote 2: Change “one-week return” to “one-day return” on second line. (This
was kindly pointed out by Katerina Simons).
Page 148:
Change n to N in three places on 8th and 9th line from bottom of page. (This
was kindly pointed out by Emilio Barone)
Page 150:
The expression on line 6 should be 
(This was
kindly pointed out by Zhipeng (Alan) Yan)
Page 157:
line 12: that should be than (This was kindly pointed out by Hongmin Zi)
Page 180:
line 16: change “lesser credit risk” to “less credit risky” (This was kindly
pointed out by Emilio Barone)
Page 185: 6th
line from bottom: 99% should be 99.9% (This was kindly pointed out by Emilio
Barone)
Page 204:
Right hand side of the equation on line 11 should be 2(1+r)s2 not (2+r)s2 (This
was kindly pointed out by Joe Winsen)
Page 210:
Second to last line: “1986” should be “1996” (This was kindly pointed out by Grigory
Stolyarov.)
Page 211:
Line 6 of new section: “Section 5.9” should be “Section 8.4” (This was kindly
pointed out by Emilio Barone)
Page 211:
Penultimate equation should be: 
. Also Christofferson should be Christoffersen in two places.
(This was kindly pointed out by Aaron Wong.)
Page 220/221: Example
9.1 calculates the 0.99 quantile (99 percentile) of the loss distribution, not
the 0.01 quantile (1 percentile). NORMINV(0.01,0,10) should be
NORMINV(0.99,0,10). The answer is correct. (This was kindly pointed out by
Jihong Feng)
Page 223: 5th
line from bottom: change 475th to 975th. (This was kindly
pointed out by Emilio Barone)
Page 227: 7th
line from bottom: Change “xi
and b” to “x and b” (This was kindly pointed out by Emilio Barone)
Page 254: In
Problem 10.17 (line 4) the reference should be to Tables 4.9 and 4.10, not to
Tables 4.8 and 4.9.
Page 277:
line 6: 1986 should be 1996 (This was kindly pointed out by Isabel Abínzano)
Page 297: In
question 12.14 first line replace “Consider an option…” by “Consider a European
call option…”
Page 312:
Footnote 9: Change “(1-Q)R” to “(1-R)Q” (This was kindly
pointed out by Emilio Barone)
Page 331:
line 9: 100,000 should be 125,000 (This was kindly pointed out by Isabel
Abínzano)
Page 340: In
problem 14.12 95% should be 1% on the
first line.
Page 373: 6th
line from bottom: Change “Snapshot 2.3” to “Snapshot 2.4” (This was kindly
pointed out by Emilio Barone)
Page 374:
First equation: Change “i-1” to “i=1” on summation sign. (This was kindly
pointed out by Emilio Barone)
Page 378:
Line 5: Change “yi=Dxi/xi”
to “Dyi=Dxi/xi”
(This was kindly pointed out by Emilio Barone)
Page 414: 4th
line from bottom: Change “European option” to “European call option” (This was
kindly pointed out by Emilio Barone)
Page 421:
First equation: Replace: Axi=lxi with Axi=lixi (This
was kindly pointed out by Emilio Barone.)
Page 421:
line 10: Replace “Define X as a
matrix whose ith row is xi…” with “Define X as a matrix whose ith column is xi…”.
The equation A=X-1LX should be A=XLX-1 and lower down X-1L*X should
be XL*X-1. (This was kindly
pointed out by Filippo Occhino.)
Page 423:
Replace 0.1707 by 0.17072 in the final term under the square root
sign. (This was kindly pointed out by Matthew Tubin)
Page 424:
Problem 1.15: change $5 million to $10 million on the first line. (This was
kindly pointed out by Emilio Barone)
Page 429: In
the answer to problem 3.8: “Figure 15.8” should be “Figure 3.9” (This was
kindly pointed out by David Lambie)
Page 433: In
answer to problem 5.9: “equation (19.7)” should be “equation (5.8)” (This was
kindly pointed out by Emilio Barone)
Page 436: In
answer to problem 6.9 change x1,
x2, and x3 to z1, z2,
and z3 on first line (This
was kindly pointed out by Emilio Barone)
Page 440: line
2: Change “9.2+9.2>11.07” to “9.1+9.1>11.07” This was kindly pointed out
by Otto Yung)
Page 440:
Problem 8.12: Change “standard deviation” to “variance” on the first line.
Change n to N in two places. Change “return” to “change in value of portfolio”
on line 2. (This was kindly pointed out
by Emilio Barone)
Page 442:
Problem 10.10: Equation should read “… = 
” (This was kindly pointed out by Emilio Barone)
Page 443:
The answer to Problem 11.4 should read: “Conditional on no default by the end
of year 2 the probability of default during year 3 is 0.0252/0.9652=0.02611. Average
default intensity for the third year is 
where 
. It is 2.65% per
year.” (This was kindly pointed out by Greg Ciresi)
Page 450:
Problem 13.20, line 1: “equation (13.1)” should be “equation (13.2)” (This was
kindly pointed out by Emilio Barone)
Page 450:
last line: 127.8 should be 128.7 (This was kindly pointed out by Isabel
Abínzano)