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About The Father of Financial Engineer
Paul Samuelson helped lay the groundwork for modern financial engineering and derivatives pricing models through his research on warrants in the 1940s and 1960s. By recognizing Louis Bachelier's early work on modeling stock prices as a random walk and proposing that price changes should be proportional to price levels, Samuelson helped develop the still-used geometric Brownian motion model. In 1965, Samuelson published two influential papers that derived the relationship between warrant prices and underlying stock prices, establishing the foundation for modern option pricing theory later expanded on by Fischer Black, Myron Scholes, and Robert Merton. Though derivatives markets grew much larger than anticipated, Samuelson notes they can enable overleveraging and lack transparency.
Detailed Information
Author: | ['szbill'] |
---|---|
Publication Year: | 2010 |
Pages: | 5 |
Language: | English |
Format: | |
Price: | FREE |
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