Investors and Markets: Portfolio Choices, Asset Prices, and Investment Advice

Book cover for Investors and Markets

Investors and Markets: Portfolio Choices, Asset Prices, and Investment Advice

Princeton University Press, Princeton, 2007

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, enabling users to create virtual markets, set the starting conditions, and then allow trading until equilibrium is reached and trading stops.

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