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Modern Portfolio Theory developed
Portfolio Selection, MarkowitzAccording to the theory, it's possible to construct an "efficient frontier" of optimal portfolios offering the maximum possible expected return for a given level of risk. This theory was pioneered by Harry Markowitz in his paper "Portfolio Selection," published in 1952 by the Journal of Finance. There are four basic steps involved in portfolio construction:
-Security valuation
-Asset allocation
-Portfolio optimization
-Performance measurement -
Mogdigliani and Miller theory first published
The Cost of Capital, Corporate Finance and the Theory of Investment published in the American Economic Review -
Capital Asset Pricing Model published
William Sharpe publishes "Portfolio Theory and Capital Markets" -
Black-Scholes Option Pricing Model published
"The Pricing of Options and Corporate Liabilities" published in the Journal of Political Economy