Myron Scholes Is the Frank E

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Myron Scholes is the Frank E. Buck Professor of Finance, Emeritus, called back to active duty at the Stanford Graduate School of

Business. He is a Nobel Laureate in Economic Sciences, and co-

originator of the Black-Scholes options pricing model. Scholes was awarded the Nobel Prize in 1997 for his new method of determining the value of derivatives. His research has focused on understanding uncertainty and its effect on asset prices and the value of options,

including ﬂexibility options. He has studied the effects of tax policy

on asset prices and incentives. He studied the effects of the taxation of dividends on the prices of securities, the interaction of incentives and taxes in executive compensation, capital structure issues with taxation, and the effects of taxes on the optimal liquidation of assets. He wrote several articles on investment banking and incentives and developed a new theory of tax planning under uncertainty and information asymmetry which led to a book with

Mark A. Wolfson called Taxes and Business Strategies: A Planning Approach (Prentice Hall, 1991).

Myron Scholes

Frank E. Buck Professor of Finance, Emeritus

Scholes is currently the Chief Investment Strategist, Janus Capital Group. Previously he served as the Chairman of Platinum Grove Asset Management and on the Dimensional Fund Advisors Board of Directors, formerly, American Century Mutual Fund Board of Directors and the Cutwater Advisory Board. He was a principal

and Limited Partner at Long-Term Capital Management, L.P. and a

Managing Director at Salomon Brothers. Other positions Scholes held include the Edward Eagle Brown Professor of Finance at the University of Chicago, Senior Research Fellow at the Hoover Institution,andDirectoroftheCenterforResearchinSecurityPrices,

and Professor of Finance at MIT’s Sloan School of Management.

Scholes earned his PhD at the University of Chicago.

Stanford University

Topic: Time Diversiﬁcation

Recommended publications

An Intellectual History of Corporate Finance Theory

Saint Louis University Law Journal Volume 54 Number 4 Remaking Law: Moving Beyond Article 11 Enlightenment Jurisprudence (Summer 2010) 2010 The Enlightenment and the Financial Crisis of 2008: An Intellectual History of Corporate Finance Theory James R. Hackney Jr. Northeastern University School of Law, [email protected] Follow this and additional works at: https://scholarship.law.slu.edu/lj Part of the Law Commons Recommended Citation James R. Hackney Jr., The Enlightenment and the Financial Crisis of 2008: An Intellectual History of Corporate Finance Theory, 54 St. Louis U. L.J. (2010). Available at: https://scholarship.law.slu.edu/lj/vol54/iss4/11 This Childress Lecture is brought to you for free and open access by Scholarship Commons. It has been accepted for inclusion in Saint Louis University Law Journal by an authorized editor of Scholarship Commons. For more information, please contact Susie Lee. SAINT LOUIS UNIVERSITY SCHOOL OF LAW THE ENLIGHTENMENT AND THE FINANCIAL CRISIS OF 2008: AN INTELLECTUAL HISTORY OF CORPORATE FINANCE THEORY JAMES R. HACKNEY, JR.* Professor powell paints a sweeping account of the relationship between the Enlightenment and law. I agree with the basic thrust of his argument, and I applaud his ability to make connections between the broad scope of intellectual history and developments in law.1 I have previously written about the interconnection between philosophical ideals and the development of legal- economic theory as it particularly relates to tort law theory.2 Through his extension of these ideas into other areas of law, Professor powell illustrates their wide implications. As Professor powell highlights, one of the principal tenets of the Enlightenment is the belief in rationality and the focus on the individual as the emphasis of analysis.3 This individualistic ideal is the foundation of neoclassical economics, which I have previously detailed.4 It is also the foundation for modern finance theory, which ascended with neoclassical economics and has a close relationship with it both theoretically and institutionally.
Myron S. Scholes [Ideological Profiles of the Economics Laureates] Daniel B

Myron S. Scholes [Ideological Profiles of the Economics Laureates] Daniel B. Klein, Ryan Daza, and Hannah Mead Econ Journal Watch 10(3), September 2013: 590-593 Abstract Myron S. Scholes is among the 71 individuals who were awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel between 1969 and 2012. This ideological profile is part of the project called “The Ideological Migration of the Economics Laureates,” which fills the September 2013 issue of Econ Journal Watch. Keywords Classical liberalism, economists, Nobel Prize in economics, ideology, ideological migration, intellectual biography. JEL classification A11, A13, B2, B3 Link to this document http://econjwatch.org/file_download/766/ScholesIPEL.pdf ECON JOURNAL WATCH Schelling, Thomas C. 2007. Strategies of Commitment and Other Essays. Cambridge, Mass.: Harvard University Press. Schelling, Thomas C. 2013. Email correspondence with Daniel Klein, June 12. Schelling, Thomas C., and Morton H. Halperin. 1961. Strategy and Arms Control. New York: The Twentieth Century Fund. Myron S. Scholes by Daniel B. Klein, Ryan Daza, and Hannah Mead Myron Scholes (1941–) was born and raised in Ontario. His father, born in New York City, was a teacher in Rochester. He moved to Ontario to practice dentistry in 1930. Scholes’s mother moved as a young girl to Ontario from Russia and its pogroms (Scholes 2009a, 235). His mother and his uncle ran a successful chain of department stores. Scholes’s “first exposure to agency and contracting problems” was a family dispute that left his mother out of much of the business (Scholes 2009a, 235). In high school, he “enjoyed puzzles and financial issues,” succeeded in mathematics, physics, and biology, and subsequently was solicited to enter a engineering program by McMaster University (Scholes 2009a, 236-237).
Robert Merton and Myron Scholes, Nobel Laureates in Economic Sciences, Receive 2011 CME Group Fred Arditti Innovation Award

Robert Merton and Myron Scholes, Nobel Laureates in Economic Sciences, Receive 2011 CME Group Fred Arditti Innovation Award CHICAGO, Sept. 8, 2011 /PRNewswire/ -- The CME Group Center for Innovation (CFI) today announced Robert C. Merton, School of Management Distinguished Professor of Finance at the MIT Sloan School of Management and Myron S. Scholes, chairman of the Board of Economic Advisors of Stamos Partners, are the 2011 CME Group Fred Arditti Innovation Award recipients. Both recipients are recognized for their significant contributions to the financial markets, including the discovery and development of the Black-Scholes options pricing model, used to determine the value of options derivatives. The award will be presented at the fourth annual Global Financial Leadership Conference in Naples, Fla., Monday, October 24. "The Fred Arditti Award honors individuals whose innovative ideas created significant change to the markets," said Leo Melamed, CME Group Chairman Emeritus and Competitive Markets Advisory Council (CMAC) Vice Chairman. "The nexus between the Black-Scholes model and this Award needs no explanation. Their options model forever changed the nature of markets and provided the necessary foundation for the measurement of risk. The CME Group options markets were built on that infrastructure." "The Black-Scholes pricing model is still widely used to minimize risk in the financial markets," said Scholes, who first articulated the model's formula along with economist Fischer Black. "It is thrilling to witness the impact it has had in this industry, and we are honored to receive this recognition for it." "Amid uncertainty in the financial markets, we are pleased the Black-Scholes pricing model still plays an important role in determining pricing and managing risk," said Merton, who worked with Scholes and Black to further mathematically prove the model.
Editor's Letter

Why I Shall Miss Merton Miller Peter L. Bernstein erton Miller’s death received the proper somewhere,” he recalls. Miller was instrumental in tak- notices due a winner of the Nobel Prize, but ing Sharpe to the Quadrangle Club in Chicago, where Mthese reports emphasize the importance of he could present his ideas to faculty members like his intellectual contributions rather than his significance Miller, Lorie, and Fama. The invitation led to an as a human being. Nobody gives out Nobel Prizes for appointment to join the Chicago faculty, and Sharpe being a superior member of the human race, but Miller and his theories were on their way. would surely have been a laureate if someone had ever Miller’s role in launching the Black-Scholes- decided to create such a prize. Merton option pricing model was even more deter- Quite aside from the extraordinary insights gained mining. In October 1970, the three young scholars from Modigliani-Miller, we owe Merton Miller a deep had completed their work, and began the search for a debt of gratitude for his efforts to promote the careers journal that would publish it. “A Theoretical Valuation of young scholars whose little-noted innovations would Formula for Options, Warrants, and Other in time rock the world of finance. Works at the core of Securities”—subsequently given the more palatable modern investment theory might still be gathering dust title of “The Pricing of Options and Corporate somewhere—or might not even have been created— Liabilities”—was promptly rejected by Chicago’s by guest on October 1, 2021.
The Capital Asset Pricing Model (CAPM) of William Sharpe (1964)

Journal of Economic Perspectives—Volume 18, Number 3—Summer 2004—Pages 25–46 The Capital Asset Pricing Model: Theory and Evidence Eugene F. Fama and Kenneth R. French he capital asset pricing model (CAPM) of William Sharpe (1964) and John Lintner (1965) marks the birth of asset pricing theory (resulting in a T Nobel Prize for Sharpe in 1990). Four decades later, the CAPM is still widely used in applications, such as estimating the cost of capital for firms and evaluating the performance of managed portfolios. It is the centerpiece of MBA investment courses. Indeed, it is often the only asset pricing model taught in these courses.1 The attraction of the CAPM is that it offers powerful and intuitively pleasing predictions about how to measure risk and the relation between expected return and risk. Unfortunately, the empirical record of the model is poor—poor enough to invalidate the way it is used in applications. The CAPM’s empirical problems may reflect theoretical failings, the result of many simplifying assumptions. But they may also be caused by difficulties in implementing valid tests of the model. For example, the CAPM says that the risk of a stock should be measured relative to a compre- hensive “market portfolio” that in principle can include not just traded financial assets, but also consumer durables, real estate and human capital. Even if we take a narrow view of the model and limit its purview to traded financial assets, is it 1 Although every asset pricing model is a capital asset pricing model, the finance profession reserves the acronym CAPM for the specific model of Sharpe (1964), Lintner (1965) and Black (1972) discussed here.
Myron S. Scholes

WORLD ECONOMIST PROFILES 16 MYRON S. SCHOLES MYRON S. SCHOLES doc. PhDr. Monika Šestáková, DrSc. In 1997 the Nobel Prize for Econo- assets – whether financial or real. In mics was awarded to two distinguis- our article we focus on one of the two – hed American economists from the Myron S. Scholes, who became famous field of financial theory – Robert C. in the financial world primarily as the Merton and Myron S. Scholes.The prize co-author (together with Fischer Black) was granted to them for the original of the model for option pricing. This theoretical contribution in the field of model is the "classic” instrument of derivative pricing - i.e. pricing of secu- financial analysts as well as financial rities that are derived from other market traders. Myron S. Scholes was born on 1 July 1941 in the town work with many other leading theoreticians from the field of Timins in the Ontario province, Canada. of finance. It was here that his cooperation with Fischer The young Myron always had an interest in financial Black and Robert Merton began (even though they wor- issues and business. He was attracted to security trading. ked in different institutions). These economists were also He spent much time studying stock-exchange reports interested in issues of the security and derivative pricing. and attempted to understand the secrets lying behind Scholes still at the same time maintained his contacts price movements of securities. Myron Scholes began uni- with the University of Chicago, in particular with the Cen- versity studies in Hamilton at McMaster University, gra- ter for Research in Security Prices.
How the Economists Got It Wrong

How the Economists Got It Wrong prospect.org/article/how-economists-got-it-wrong James Galbraith, The American Prospect, December 19, 2001 The American Economic Association (AEA) met January 7-9 in Boston, for a millennial program distinguished by its attention to international policy issues, most particularly financial crises (as in Asia) and the failure of the so-called "economic transition" (as in Russia). And yet, in this odd rush to relevance, something was curiously awry. Apart from a panel including former World Bank chief economist Joseph Stiglitz, the meetings featured almost no one with a record of criticizing the institutions that gave us the Asian crisis or the transition failure. Instead, they were dominated--in session after session--by the architects of the present world order, including Yeltsin advisers Andrei Shleifer and Anders Aslund, the International Monetary Fund's Stanley Fischer, and U.S. Treasury Secretary Lawrence Summers. Even the arch-speculator Myron Scholes appeared. Never, perhaps, has such a luminous crowd gathered to discuss so disastrous a set of its own failings. Equally striking, from the larger intellectual standpoint, was the lack of retrospective in this year 2000 program of the AEA. The great issues of economic policy--inflation and unemployment, economic growth and stabilization, the government's budget, inequalities of income and wealth--were missing. The central themes of economic theory, including markets and market structure, competition and monopoly, efficiency and equity, and the business cycle, were to be found only in sessions devoted to narrowly defined applied cases. Reading through paper titles, one finds no mention of John Maynard Keynes, Adam Smith, or Karl Marx, or even of Paul Samuelson or Milton Friedman.
Ideological Profiles of the Economics Laureates · Econ Journal Watch

Discuss this article at Journaltalk: http://journaltalk.net/articles/5811 ECON JOURNAL WATCH 10(3) September 2013: 255-682 Ideological Profiles of the Economics Laureates LINK TO ABSTRACT This document contains ideological profiles of the 71 Nobel laureates in economics, 1969–2012. It is the chief part of the project called “Ideological Migration of the Economics Laureates,” presented in the September 2013 issue of Econ Journal Watch. A formal table of contents for this document begins on the next page. The document can also be navigated by clicking on a laureate’s name in the table below to jump to his or her profile (and at the bottom of every page there is a link back to this navigation table). Navigation Table Akerlof Allais Arrow Aumann Becker Buchanan Coase Debreu Diamond Engle Fogel Friedman Frisch Granger Haavelmo Harsanyi Hayek Heckman Hicks Hurwicz Kahneman Kantorovich Klein Koopmans Krugman Kuznets Kydland Leontief Lewis Lucas Markowitz Maskin McFadden Meade Merton Miller Mirrlees Modigliani Mortensen Mundell Myerson Myrdal Nash North Ohlin Ostrom Phelps Pissarides Prescott Roth Samuelson Sargent Schelling Scholes Schultz Selten Sen Shapley Sharpe Simon Sims Smith Solow Spence Stigler Stiglitz Stone Tinbergen Tobin Vickrey Williamson jump to navigation table 255 VOLUME 10, NUMBER 3, SEPTEMBER 2013 ECON JOURNAL WATCH George A. Akerlof by Daniel B. Klein, Ryan Daza, and Hannah Mead 258-264 Maurice Allais by Daniel B. Klein, Ryan Daza, and Hannah Mead 264-267 Kenneth J. Arrow by Daniel B. Klein 268-281 Robert J. Aumann by Daniel B. Klein, Ryan Daza, and Hannah Mead 281-284 Gary S. Becker by Daniel B.
Private Notes on Gary Becker

IZA DP No. 8200 Private Notes on Gary Becker James J. Heckman May 2014 DISCUSSION PAPER SERIES Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor Private Notes on Gary Becker James J. Heckman University of Chicago and IZA Discussion Paper No. 8200 May 2014 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: [email protected] Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. IZA Discussion Paper No. 8200 May 2014 ABSTRACT Private Notes on Gary Becker* This paper celebrates the life and contributions of Gary Becker (1930-2014).
Lessons from the Laureates

Georgia State University ScholarWorks @ Georgia State University UWRG Working Papers Usery Workplace Research Group 1-1-2009 Lessons from the Laureates William Breit Trinity University, [email protected] Barry T. Hirsch Georgia State University, [email protected] Follow this and additional works at: https://scholarworks.gsu.edu/uwrg_workingpapers Recommended Citation Breit, William and Hirsch, Barry T., "Lessons from the Laureates" (2009). UWRG Working Papers. 153. https://scholarworks.gsu.edu/uwrg_workingpapers/153 This Article is brought to you for free and open access by the Usery Workplace Research Group at ScholarWorks @ Georgia State University. It has been accepted for inclusion in UWRG Working Papers by an authorized administrator of ScholarWorks @ Georgia State University. For more information, please contact [email protected]. W.J. Usery Workplace Research Group Paper Series ANDREW YOUNG SCHOOL OF POLICY STUDIES Lessons from the Laureates* William Breit† and Barry T. Hirsch± January 2009 Abstract This paper uses as source material twenty-three autobiographical essays by Nobel economists presented since 1984 at Trinity University (San Antonio, Texas) and published in Lives of the Laureates (MIT Press). A goal of the lecture series is to enhance understanding of the link between biography and the development of modern economic thought. We explore this link and identify common themes in the essays, relying heavily on the words of the laureates. Common themes include the importance of real-world events coupled with a desire for rigor and relevance, the critical influence of teachers, the necessity of scholarly interaction, and the role of luck or happenstance. Most of the laureates view their research program not as one planned in advance but one that evolved via the marketplace for ideas.
Myron Scholes, Ph.D. Biography

Biography Myron Scholes, Ph.D., is Chief Investment Strategist at Janus Henderson Investors. In this role, he leads the firm’s evolving asset allocation product development efforts and partners with the investment team, contributing macro insights and quantitative analysis specific to hedging, risk management and disciplined portfolio construction. Among his many accomplishments, Dr. Scholes is the Frank E. Buck Professor of Finance, Emeritus, at the Stanford Graduate School of Business, where he teaches a course on Managing Under Uncertainty and The Evolution of Finance. He is a member of the Econometric Myron Scholes, Ph.D. Society and, in 1990, served as President of the American Finance Association. Dr. Scholes is Chief Investment Strategist widely known for his seminal work in options pricing, capital market equilibrium, tax policies and the financial services industry. He is a Nobel Laureate in Economic Sciences and co-originator of the Black-Scholes options pricing model, for which he was awarded the Nobel Prize in 1997. He is a director of Dimensional Fund Advisors mutual funds and several other private companies and has served as an advisor to the Guangdong Provincial Government. Dr. Scholes holds a Ph.D. from the University of Chicago. He has honorary doctorate degrees from the University of Paris, France; McMaster University, Canada; Louvain University, Belgium; and Wilfred Laurier University, Canada. He has honorary Professorships from Nanjing University, Nanjing Audit University and Xiamen University. He was awarded the Innovator of the Year Award from the Chicago Mercantile Exchange and the Lifetime Achievement Award from the Derivatives Association. Additionally, he is a member of the American Academy of Arts and Sciences.
Robert C. Merton and the Science of Finance- a Collection

BRIEF / ROBERT C. MERTON AND THE SCIENCE OF FINANCE CFA INSTITUTE RESEARCH FOUNDATION / BRIEF ROBERT C. MERTON AND THE SCIENCE OF FINANCE A COLLECTION LUIS GARCIA-FEIJÓO, CFA, CIPM, LAURENCE B. SIEGEL, AND TIMOTHY R. KOHN, EDITORS GARCIA-FEIJÓO, SIEGEL, AND KOHN ROBERT C. MERTON AND THE SCIENCE OF FINANCE A Collection Luis Garcia-Feijóo, CFA, CIPM, Laurence B. Siegel, and Timothy R. Kohn, Editors Statement of Purpose CFA Institute Research Foundation is a not-for- profit organization established to promote the development and dissemination of relevant research for investment practitioners worldwide. Neither CFA Institute Research Foundation, CFA Institute, nor the publication’s edi- torial staff is responsible for facts and opinions presented in this publication. This publication reflects the views of the author(s) and does not represent the official views of CFA Institute Research Foundation. CFA®, Chartered Financial Analyst®, and GIPS® are just a few of the trademarks owned by CFA Institute. To view a list of CFA Institute trademarks and the Guide for the Use of CFA Institute Marks, please visit our website at www.cfainstitute.org. © 2020 CFA Institute Research Foundation. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright holder. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service.