Updated-Case Study4

Chapter 6 - Sup. Learning - Classification models/CaseStudy4 - Portfolio Management-RiskAppetite/PortfolioManagementRiskToleranceRiskAppetite.ipynb

@@ -222,9 +222,10 @@
     "\n",
     "The data can be used to get the implied Risk Aversion for the household from the Household's demographics, net worth, financial and non-financial assets as per _Schooley and Worden (1996) (Risk Aversion Measures: Comparing Attitudes and Asset Allocation. Financial Services Review. 5 (2): 87-99) and is shown below:_ \n",
     "\n",
-    "<img src=\"CodeEqn.gif\" >\n",
+    "\\begin{equation}\n",
+    "RRA = \\frac{RiskFreeAssets+RiskyAssets}{Risky Assets}*\\frac{MarketExcessReturn}{MarketVariance}*\\frac{1}{1-h}\n",
+    "\\end{equation}\n",
     "\n",
-    "![](CodeEqn.gif)\n",
     "\n",
     "* **Risky assets** is investments in mutual funds, stocks, bonds, commodities, and\n",
     "real estate, and an estimate of human capital. \n",
@@ -377,14 +378,7 @@
    "metadata": {},
    "source": [
     "In order to filter the features further we do the following:\n",
-    "1. Check the description in the Data Dictionary (https://www.federalreserve.gov/econres/files/codebk2009p.txtand only keep the features that are intuitive based on subjective judgement\n",
-    "The description of the factors is as follows: \n",
-    "\n",
-    "<img src=\"ListOfFactors.PNG\" width=800 />\n",
-    "\n",
-    "![](ListOfFactors.PNG)\n",
-    "\n",
-    "\n",
+    "1. Check the description in the Data Dictionary (https://www.federalreserve.gov/econres/files/codebk2009p.txtand only keep the features that are intuitive based on subjective judgement and is based on behavioral, financial and demographic attributes.\n",
     "\n",
     "2. Keep only the intuitive factors as of 2007 only and remove all the intermediate features and features related to 2009, as the variables of 2007 are the only ones required for predicting a change in the risk tolerance.\n"
    ]