- I remember having read that it is advisable to consider risk tolerance the lower of willingness or ability. But on pg 161, solution 11A – Mueller case study – “ ability to assume atleast average….stated preference …apparently indicates a below average willingness…In sum risk tolerance is AVG.” Nowhere they mention education, reconcile the difference etc., but straight away Average. It is the case with many examples, just like a flip of a coin. 2) Sol 13A, pg 166 -> willingness : below avg, ability average, overall below average. Reason: willingness dominates in this case. This indicates instead of lower of willingness or ability, we need to consider which dominates ??? 3) Q 12 PG 152 -> investor says “we invest only in the cos which we are familiar with…will not sell a security for less than what we paid…given our need for income, only div paying stocks, …” But the answer as Asset allocation B includes non-us stocks, non-us bonds, small cap stocks etc… 4) On pg 167, sol ii, can someone please confirm how the 4.42% is computed. Use CFs and IRR in calc, it gives me 4.2% only. Please clarify. Please clarify.