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Featured Faculty Books: Investors and Markets

William F. Sharpe, The STANCO 25 Professor of Finance, Emeritus; Nobel Laureate in Economics, 1990

 

Investors and Markets: Portfolio Choices, Asset Prices, and Investment Advice
by William F. Sharpe. Princeton: Princeton University Press, by arrangement with the Bendheim Center for Finance of Princeton University, c2007.

 

 

 

Nobel Laureate financial economist William Sharpe shows that investment professionals cannot make good portfolio choices unless they understand the determinants of asset prices. But until now asset-price analysis has largely been inaccessible to everyone except PhDs in financial economics. Based on his Princeton lecture in finance, Sharpe details his state-of-the-art approach to asset pricing in a nonmathematical form that will be comprehensible to a broad range of investment professionals. Sharpe makes this technique accessible through his computer program (available for free on his website) enabling users to create virtual markets, set the starting conditions, and then allow trading until equilibrium is reached and trading stops.

About William Sharpe

 

Professor Sharpe's research interests focus on macro-investment analysis and equilibrium in capital markets. Sharpe was one of the originators of the Capital Asset Pricing Model, developed the Sharpe Ratio for investment performance analysis, the binomial method for the valuation of options, the gradient method for asset allocation optimization, and returns-based style analysis for evaluating the style and performance of investment funds.

 

Sharpe has published articles in a number of professional journals, including Management Science, The Journal of Business, The Journal of Finance, The Journal of Financial Economics, The Journal of Financial and Quantitative Analysis, The Journal of Portfolio Management, and The Financial Analysts' Journal.

He has also written six books, including Portfolio Theory and Capital Markets (McGraw-Hill, 1970 and 2000), Asset Allocation Tools (Scientific Press, 1987), Fundamentals of Investments (with Gordon J. Alexander and Jeffrey Bailey, Prentice-Hall, 2000), and Investments (with Gordon J. Alexander and Jeffrey Bailey, Prentice-Hall, 1999).

Sharpe is past president of the American Finance Association. In 1990 he received the Nobel Prize in Economics.
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