Shahid Monametsi
This chapter discusses the basic tools used in finance when analyzing a financial market ( by the looks of it they are mostly focused on bonds in this chapter). I found this chapter to be easy to understand as it is often times the applied situations on tests that I struggle to understand. This chapter, however, seemed to have none of that built into the lesson, so I am positive that I will be able to succeed. This chapter covers the range of approaches that people (investors) take when they consider purchasing ownership. It was a little easier to digest as the last chapter covered this topic in great detail (the slightly easier portion of the unit test). To me this all seems very relate-able as risk aversion happens in everyday life. It only seems natural that it play a part in finance when choosing a stock or bond. Even the equations in this chapter were easy to grasp as they were all covered to an extent in math classes.
The only thing that I struggle to understand was the utility function. I'm not really sure how they got that shape from the risk aversion. One would think that wealth would only raise and that the curve would be concave up. I fail to comprehend why it is a flat line and hope to uncover this in the future, before any testing.
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