(Name in parentheses is the person who reported it)
Text corrections
P. 9, 4th line after first equation. Replace "E(f)" with "E(Ф)". (Bruce Bagamery, Central Washington)
P. 18, New Features, 2nd bullet, 1st line. Replace "eigth" with "eighth". (Bruce Bagamery, Central Washington)
P. 35, Cost and Profitability, 1st new full paragraph, 1st line. Starting with "At a price ...", change "2005 of around $875,000" to "2007 of around "$3,000,000," (Bruce Bagamery, Central Washington)
P. 41, in the gray box. first full paragraph, third
line. Should be "May" instead of "September."
(Thorsten Dohrau, Formaxx AG)
P. 63, First line of last paragraph. After "is" put "
ST1 (double subscript as in the next line). (Shamshul Alam, Lethbridge)
P. 77, third line under Effect of Time to Expiration.
Sentence should say "The stock price is ST1." (double subscript on ST1)
(Dimitris Leimonis, American College of Greece)
P. 91, Problem 14, should read "Repeat Question 13 ..."
(students David Morrison, Ronny Kashat, and Eric Tomaszewski and Professor
Margaret Smoller, Wayne State). Also, third line after Problem 10,
should read "problems 11 through 16" and not "problems 14 through 19"
P. 95, second line under ONE-PERIOD BINOMIAL MODEL heading. Change "typically". (Bruce Bagamery, Central Washington)
P. 102, Making the Connection, 1st new full paragraph, 2nd line. Replace "=D 0.80" with "d = 0.80". (Bruce Bagamery, Central Washington)
P. 125, Problem 7, 5th line, change " of = is 0.90." to "of d = 0.90." (students David Morrison, Ronny Kashat, and Eric Tomaszewski and Professor Margaret Smoller, Wayne State)
P. 105, Third equation from bottom, "26.25" should be "56.25". (Shamshul Alam, Lethbridge)
P. 150, formula for Call Vega. Replace "e" in numerator with "S0".
P. 157, 5th line from bottom. Replace "√250" with "250". (Bruce Bagamery, Central Washington)
P. 162, Table 5.7, 2nd line from bottom. Replace "0.0463 (July)" with "0.0453 (July)". (Bruce Bagamery, Central Washington)
P. 178. Problems were renumbered in the 8th edition and some references to problem numbers are incorrect. (1) fourth line from the top, should refer to problems 7 through 14, (2) problem 8, third line, should refer to "problem 7", (3) problem 9, third line and problem 10, second line, should refer to problem 7, (4) problem 13, third line, should refer to problem 12, (5) problem 14, first and third lines, should refer to problem 13 (Mike Hemler, Notre Dame)
P. 189, fn. 1, 1st line. Replace "whomever" with "whoever". (Bruce Bagamery, Central Washington)
P. 247, fn. 7. Replace (X2 - X1) with (X2 - X1)e-rcT (also: c is sub to r as in rc but both above the line). (Bruce Bagamery, Central Washington)
P. 272, Table 8.2. The following (Bruce Bagamery and Long Nguyen, Central Washington):
8/5: Replace “1 17.5/32” with “1 6.5/32” and "$1,203.15" with "$1,203.13"
8/8: Replace “$2,671.88” with “$1,288.12”
8/13: Replace “2 8.5/32” with “2 19.5/32.”
8/18: Replace “8.5/32” with “9.5/32.”
P. 291, 5th line below first shaded equation, change "value" to "price" (Bruce Bagamery, Central Washington)
P. 309, 2nd equation, change E(S0) to S0. (Bruce Bagamery, Central Washington)
P 317, first line after second equation . "0" after "S" should be subscripted and "T" after "(1 + r)" should be superscripted. (Bruce Bagamery, Central Washington)
PP. 325-326, Problems 15 & 16 refer to Problem 18. They should refer to Problem 13. (Keith Godfrey)
P. 343, Under An Example, 8th line, change 0.45 to 0.48. Also, in the equation, change 0.40 in the denominator to 0.48 and the solution from 0.0199 to 0.0172. Change 1.99 percent to 1.72 percent two places in the paragraph discussion that follows.
P. 352, Problems 11 and 19 refer to Problem 15. They should refer to Problem 10. (Keith Godfrey)
P. 375, last paragraph, second and third lines. Change "93.53125" to "93.453125" (Margaret Smoller and Ronny Kashat of Wayne State)
p. 403, Question 4.a. Replace question mark after "effectiveness" with period. (Bruce Bagamery, Central Washington)
P. 414, second line above equation. "FXRB" should be subscripted; the following equation, "FLRB" should be "FXRB" (Bruce Bagamery, Central Washington). In that same sentence, the tn should be tn (subscript) (Mike Hemler, Notre Dame).
P. 427, Table 12.6, the $ sign superscript on the R at the bottom of the table should be a € sign. (Pongpat Pravudhikul, Chulalongkorn University, Thailand.)
P. 436, shaded equation. The two bond (B) terms should have the zeroes as subscripts. (Mike Hemler, Notre Dame)
P. 438, Table 12.10, last line of paragraph before last equation. Change "20.00911854" to -0.00911854. (Mike Hemler, Notre Dame).
P. 442, Under Key Terms, it should refer to continuing to Chapter 13, not Chapter 4 (Kaji Dahal, Tribhuvan University, Nepal)
P. 453, first equation (not shaded). Equals sign should be a minus sign. (Mike Hemler, Notre Dame).
P. 460, Table 13.4, calculation under "5." "-0.0502" should be "-0.0520" (Mike Hemler, Notre Dame).
P. 468, Table 13.8, last number on the right in the first row should be "$15,000,000" and not "$15,030,000". This will also change the effective annual rate below the table from "7.41%" to "7.64%". (Kari Kinnunen, University of Eastern Finland)
P. 475, Equation just below middle of page starting "0.115(0.8929 ...): Last term should be "1(0.6967)" instead of :1(0.8929)". (Pongpat Pravudhikul, Chulalongkorn University, Thailand.)
P. 490, fourth line from bottom. Omit reference to p. 488. The table is on this page (490).
P. 508, Table 14.8. Move the row for "Value of Option" over one column so that 13.45 is below the "Lookback Call Payoff" column and 6.64 is below the "Fixed Strike Lookback Put Payoff" column. (Mike Hemler, Notre Dame)
Solutions Corrections
Chapter 12, # 10. Add this to the third paragraph. "At this point, the manager will be paying a fixed rate in pounds. Since he wants a floating rate in pounds, he would then enter into a plain vanilla interest rate swap in pounds. He would pay a fixed rate of 4.9% and receive the floating rate in pounds, with a 30 million pound notional principal." (Kaji Dahal, Tribhuvan University, Nepal)
Chapter 14, # 6: The cost of the portfolio insurance should be (10,572,875 - 10,087,039)/10,097,070 = 0.0481 (Kaji Dahal, Tribhuvan University, Nepal)
PowerPoint Corrections
(none specifically but some text corrections carry over to the Powerpoints since equations are copied directly from text into Powerpoints)
Test Bank Corrections
Chapter 13, # 17: Answer d should be changed to 4.13 percent. It is the correct answer (S. S. S. Kumar, Indian Institute of Management)
Last updated: January 3, 2012