Regarding practice questions #4 (page 341 of Volume 1) and #8 (page 344 of Volume 1), how do you know to truncate Size parameter from 900 million to 900 thousand and 10 billion to 10 thousand when plugging into the natural log? Anyone know?
The question states:
“Company size is measured by the natural logarithm of the book value of company’s assets in thousands of Canadian dollars.”
So 900,000,000 is inserted as 900,000 in the equation.
"Size_i = natural log of the market capitalization of company i in millions of dollars"
So 10,000,000,000 is inserted as 10,000.
Good point, totally overlooked this. Thank you!