William F. Sharpe
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1990
Born: 16 June 1934, Boston, MA, USA
Affiliation at the time of the award: Stanford University, Stanford, CA, USA
Prize motivation: “for their pioneering work in the theory of financial economics”
Prize share: 1/3
William Sharpe was born in Boston, MA, USA. He received his Ph.D. from the University of California in 1961. Sharpe was influenced by the theories of Harry Markowitz, whom he met while working at the RAND Corporation (1957-61). Later, Sharpe taught economics at the University of Washington (1961-68) and from 1970 onwards at Stanford University. Sharpe later retired from to teaching to work as a consultant to some of America's largest banks.
William Sharpe’s research yielded the Capital Asset Pricing Model (CAPM) in a paper submitted in 1962. The CAPM theory is based on the earlier work of fellow Laureate Harry Markowitz. The model makes it possible to judge a portfolio’s performance by the amount of risk inherent in such investments, and help managers decide when potential return is worth the risks of the investment.
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