In the last 50 years there have been two revolutionary ideas in finance: the Capital Asset Pricing Model (CAPM), the history of which was told in Capital Ideas, and the Black-Scholes option pricing model, formally introduced in a seminal research paper (that changed modern finance) by Black and Myron Scholes in 1973.Its publication occurred at the same time as the creation of the CBOE and led to the widespread use of options trading by market participants from institutional to individual investors.The Black-Scholes pricing model was so revolutionary that nearly 30 years later, books and papers are still being published on it.But not only did Fischer Black revolutionize finance by providing the methodology to trade a new instrument, he revolutionized Wall Street by effectively developing what is now known as quantitative finance.Fischer, trained as an accountant and computer programmer, was Wall Street's first quant.Black's life and work encapsulate modern financial theory, for without Fischer there would be no theory, no risk management tools, perhaps even no exotic derivative instruments.He set the standard that many others would follow.He began his undergraduate studies in physics and then moved on to mathematics and computer programming.In 1967 his life changed forever when he met Jack Treynor, one of the developers of Capital Asset Pricing Model (CAPM).After spending 15 years in academia, he moved to Wall Street:?Goldman Sachs.At Goldman, Black developed even more quantitative models that tens of thousands of professionals use every day.While there is no question that Fischer is well-known within the investment community, his name is not unknown to the broader investing/business audience.Articles about Fischer and his contributions to options theory and modern finance have appeared in Scientific American, Wired, and BusinessWeek.He and his theories have also been discussed on the BBC and in the PBS documentary on LTCM.He was noted as one of the 'Thinkers of the Century' by Fortune magazine in their Investor's Guide 2000.Additionally, all his papers and writings are archived at MIT.Fischer Black may well be the financial world's equivalent to physics' Richard Feynman.
Cover
Contents
Title
Copyright
Dedication
Acknowledgments
Foreword: Unafraid Hard Thinking
Preface
Prologue: The Price of Risk
Chapter One: Thou Living Ray of Intellectual Fire
Chapter Two: An Idea in the Rough
Chapter Three: Some Kind of an Education
Chapter Four: Living up to the Model
Chapter Five: Tortuous Economic Intuition
Chapter Six: The Money Wars
Chapter Seven: Global Reach
Chapter Eight: Stagflation
Appendix 8.A: The Cambridge Capital Controversy
Chapter Nine: Changing Fields
Chapter Ten: What do Traders do?
Chapter Eleven: Exploring General Equilibrium
Epilogue: Nothing is Constant
Appendix A: A Financial Notes Chronology
Appendix B: A Newsletter Chronology
References
Index