Chapter
Modern Finance Theory
The academic revolution that transformed Wall Street.
5 entries · Chronological order
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1
Harry Markowitz
1927 CENobel Laureate who mathematized finance by establishing modern portfolio theory and the pivotal role of diversification
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2
Modern Portfolio Theory
1952 CEThe mathematical framework establishing that portfolio risk depends on asset correlations, not individual securities
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3
Efficient Market Hypothesis
1965 CEThe theory that asset prices fully reflect all available information, making it impossible to consistently beat the market
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4
Black-Scholes Options Pricing
1973 CEA mathematical formula used to determine the fair market price of derivatives and theoretical options
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5
Index Fund
1975 CEInstitutional FormA passive investment vehicle designed to track a specific market index and minimize management fees
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