April 13, 2003
OEQ
Some highlights from Sunday's "office hours".
There was a good bit of explaining to go along with the following diagram.
As you can see, people are starting to tackle the more difficult questions.
We got a little deeper into how the curvature of the utility function leads to risk aversion (or a positive value for risk) by extending the analysis to the case on the left. The left-hand diagram show the same asset from the point of view of a risk neutral agent with a straight-line utility function.
Bring back the French franc!
The return is zero or plus 22.2% depending on which way the exchange rate goes.
Pay close attention to the pink e.
