Pricing the Future: Finance, Physics, and the 300-year Journey to the Black-Scholes Equation

Pricing the Future: Finance, Physics, and the 300-year Journey to the Black-Scholes Equation

by George G. Szpiro

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Overview

Pricing the Future: Finance, Physics, and the 300-year Journey to the Black-Scholes Equation by George G. Szpiro

Options have been traded for hundreds of years, but investment decisions were based on gut feelings until the Nobel Prize–winning discovery of the Black-Scholes options pricing model in 1973 ushered in the era of the “quants.” Wall Street would never be the same.

In Pricing the Future, financial economist George G. Szpiro tells the fascinating stories of the pioneers of mathematical finance who conducted the search for the elusive options pricing formula. From the broker's assistant who published the first mathematical explanation of financial markets to Albert Einstein and other scientists who looked for a way to explain the movement of atoms and molecules, Pricing the Future retraces the historical and intellectual developments that ultimately led to the widespread use of mathematical models to drive investment strategies on Wall Street.

Product Details

ISBN-13: 9780465022489
Publisher: Basic Books
Publication date: 11/29/2011
Pages: 320
Product dimensions: 6.40(w) x 9.40(h) x 1.30(d)
Age Range: 13 - 18 Years

About the Author

George G. Szpiro is a mathematician, financial economist, and journalist. He is the Israel correspondent of the Swiss daily Neue Zürcher Zeitung and has published in Science, Nature, and the Jerusalem Report. He is the author of Kepler's Conjecture, The Secret Life of Numbers, Poincaré's Prize, and Numbers Rule. He lives in Switzerland.

Table of Contents

Preface ix

Introduction xi

1 Flowers and Spices 1

2 In the Beginning 21

3 From Rags to Riches 37

4 The Banker's Secretary 55

5 The Spurned Professor 73

6 Botany, Physics, and Chemistry 81

7 Disco Dancers and Strobe Lights 109

8 The Overlooked Thesis 125

9 Another Pioneer 137

10 Measuring the Immeasurable 143

11 Accounting for Randomness 161

12 The Sealed Envelope 169

13 The Utility of Logarithms 181

14 The Nobelists 195

15 The Three Musketeers 211

16 The Higher They Climb 229

17 The Harder They Fall 241

18 The Long Tail 255

Appendix 259

Notes 263

Bibliography 277

Index 283

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