Typos and errors in Derivatives Markets, first printing

For 3rd Edition errata, and up-to-date information about my R package, derivmkts, please see this page

viii, TOC"Reasons Not to Hedge" is on p. 103, not p. 102
xxivomitted from thanks Ravi Jagannathan (Northwestern University) and Virginia France (University of Illinois, Urbana-Champaign)
xxiv, xxv "Skiadis" should be spelled "Skiadas" (also on xxv)
19, 1st para "assett"
32, Fig 2.5 The column heading "strike" should be over the second column
53, Prob 2.7(a)"forward price of $100" should read "forward price of $55"
87, Prob 3-18Either the problem needs to specify profit diagrams, or (c) needs to mention borrowing
98, Figure 4.7The legend entry that reads "Unhedged seller" should read "Unhedged buyer"
132, BoxA positive interest rate rules out bidirectional time travel, but not unidirectional time travel
154, Prob 5.5(c)In the last line, "resulting long" should read "resulting short"
156, Prob 5-15Add to part (c): "What are the new upper and lower no-arbitrage bounds?"
178First line below "Gold Investments", "Portfolio" is misspelled.
192In the 4th paragraph, references to 10,000 barrels should be 100,000 barrels (to be consistent with 1.2m in subsequent discussion.
223, Figure 7.5 Columns headings are missing from the figure
320, Figure 10. The bottom right node should have a price of $26.416 (instead of 29.416).
367, Footnote 1On the right-hand side of the equals sign, the formula should be "BSCall(41,40,0.30,0.08,0.25,0)"
368, Footnote 2On the right-hand side of the equals sign, the formula should be "BSPut(41,40,0.30,0.08,0.25,0)"
449, Example 14.3In this example Microsoft is the strike asset. This isn't clear from the wording.
368, Footnote 2The put price is $1.607, not $3.399
493, Example 16.1The debt-to-value ratio of the firm is 62.93/90 = 0.699.
493, Example 16.1The last line of Example 16.1 should the say "The debt yield of 9.26\% is 326 basis points greater than the risk-free rate."
496, 8th lineLast sentence is ambiguous: "Debt value would decline by $0.66."
504, sidebar Last paragraph, should be $1.6b.
543, Eq. 17.5Denominator should be (1+r)^T
548, Eq. 17.8On both sides of the equals sign, should be 1/(1+r)^T (not "T+r")
644 Greek thetas should be lower case
796 End of first paragraph: "never be less than 100%" should be "never be greater than 100%"
796 Third equation, should be "ln(5048.62/2292.89)=78.93%"

© Copyright 2002, Robert McDonald. You can send me mail at r-mcdonald@northwestern.edu.

Last modified: Wed Jun 15 11:08:43 CDT 2016