Risk Management and
Financial Institutions, Fourth Edition
The following typos
and other errors are in the first printing of the fourth edition:
Page 100: line 8: Replace “$107,250” with “$107,500”
(This was kindly pointed out by Emilio Barone.)
Page 139: In equation on the third
line replace “N-1(−q)” by “N-1(1−q)”
and on the fourth line replace “N(−q)= −N(q)”
by “N-1(1−q)= −N-1(q)” (This was kindly pointed out by Emilio Barone.)
Page 141: Final equation: insert “N(” and “)” around expression on left hand side. (This was
kindly pointed out by Emilio Barone.)
Page 142: Line 6: 33.6% should be
36.6% and 0.336 should be 0.366. (This was kindly pointed out by Emilio
Barone.)
Page 143: line 9: Expression for p2 should be 
(This was kindly
pointed out by Hendrik Hoffman)
Page 144: line 18: “KerT−S0”
should be “Ke−rT−S0”
(This was kindly pointed out by Emilio Barone.)
Page 145: lines 8 to 11: 84.18 should
be 81.18 in two places and 28.6 should be 31.6 in two places. (This was kindly
pointed out by Emilio Barone.)
Page 218: line 10 under table.
Replace “exchange rate” with “S&P 500” (This was kindly pointed out by
Hendrik Hoffman)
Page 252: Problem 11.14: The copula
correlation should be specified as 0.2
Page 266: Example 12.11: Second
equation. Replace 
by 
(This was kindly
pointed out by Thu Phuong Pham.)
Page 296: Problem 13.6: Replace
$400,583 with $400,914 (This was kindly pointed out by Emilio Barone.)
Page 297: Problem 13.15: Replace
$400,583 with $400,914 (This was kindly pointed out by Emilio Barone.)
Page 306: line 7: 40,995,765 should be
40,995.765 (This was kindly pointed out by Emilio Barone.)
Page 316: Example 14.2. Some of the
numbers are not accurate. 5.326 on lines 5, 7, and 13 should be 5.318. 2.625 on
lines 10 and 12 should be 2.620. 5.976 on lines 12 and 13 should be 5.965. (This
was kindly pointed out by Reinhard Wagner)
Page 318: (14 lines from end): “Table
10.2” should be “Table 10.1” (This was kindly pointed out by Emilio Barone.)
Page 362: (8 lines under table)
Change “which in turn is than that” to “which in turn is smaller than that”
(This was kindly pointed out by Hendrik Hoffman)
Page 375-6: (end of 375, top of 376)
Change “10-changes” to “10-day changes” in three places. (This was kindly
pointed out by Hendrik Hoffman)
Page 379: Problem 17.2: Replace
“footnote 3” by “footnote 4” (This was kindly pointed out by Emilio Barone.)
Page 412: Footnote should be “See J.
Bai and P. Collin-DuFresne, “The CDS-Bond Basis,”
Working Paper, 2013, SSRN-id2024531. (This was kindly pointed out by Emilio
Barone.)
Page 415: In Table 19.5, ratio for the
A rating should be 4.9 not 5.8. (This was kindly pointed out by Emilio Barone.)
Page 416: (Line 3 under table “Table
19.5 should be “Table 19.6” (This was kindly pointed out by Hendrik Hoffman)
Page 417: (13 lines from end) 5.422
should be 6.002. (This was kindly pointed out by Emilio Barone.)
Page 431: Example 20.1, line 3: after
“max(V,0)” insert “where V is” (This was kindly
pointed out by Emilio Barone.)
Page 464: line 5: Replace “Table
10.3” with “Table 10.1” (This was kindly pointed out by Emilio Barone.)
Page 565: five lines from end:
replace 
by 
in two places.
Page 570: (line 5 of Business Snapshot
27.1) Change “saving Santander” to “saving MdP”
(This was kindly pointed out by Hendrik Hoffman)
Page 576: Problem 27.7. Improve
wording to “Calculate the interest rate paid by MdP six
years after the beginning of the deal in Business Snapshot 27.1 if the Euribor rate proves to be 8% from year 2 onward” (This was
kindly pointed out by Hendrik Hoffman)
Page 626: equation L.3: Replace T by t
(This was kindly pointed out by Emilio Barone.)
Page 640: Problem 7.5: Answer should
read: The risk-free rate with annual compounding is 2/98 or 2.04%. The
probability of default is 3/98 or 3.06%. (This was kindly pointed out by Emilio
Barone.)
Page 647: Problem 11.13: 0.458 should
be 0.411
Page 648: Problem 11.15: Probability of default and
copula correlation should be 3.92% and 11.2% respectively (This was
kindly pointed out by Emilio Barone.)
Page 651: Problem 14.8: line 4:
Replace 0.9 by 0.1 (This was kindly pointed out by Emilio Barone.)
Page 661: line 2: delete “by more
than $5 million” (This was kindly pointed out by Emilio Barone.)