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Published in:
2013 | OriginalPaper | Chapter
The Times
Author : Colin Read
Published in: The Efficient Market Hypothesists
Publisher: Palgrave Macmillan UK
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The two-decade period from 1952 to 1972 created a revolution in finance theory. However, the modern era in finance started slowly. Harry Markowitz had developed the Modern Portfolio Theory, which, while intuitively appealing, was nearly impossible to apply because of limitations in computing power. Indeed, Modern Portfolio Theory was not even taught at the business school of its creation until the great mind Eugene Fama began teaching there. Nor was its intuition immediately obvious until James Tobin, the great mind described in the next part of this book, created a new interpretation based on a risk-free asset.