INVITED EDITORIAL COMMENT The State of Research in Finance

• Published in: Journal of portfolio management Vol. 43; no. 4; pp. 1 - 4
• Main Author: Kritzman, Mark
• Format: Journal Article
• Language: English
• Published: London Pageant Media 01.07.2017
• Subjects: Capital assets; CAPM; Collaboration; Economic crisis; Economic models; Equilibrium; Interest rates; International finance; Investment policy; Investments; Mathematical models; Partial differential equations; Portfolio management; Pricing policies; United States > US
• DOI: 10.3905/jpm.2017.43.4.001
• ISSN: 0095-4918

Thirty-five years later, Michael Hopewell and George Kaufman [1973] published a paper in theAmerican Economic Review showing the link between Macaulay's duration measure and a bond's price sensitivity to changes in interest rates--a measure now commonly used in controlling a portfolio's interest rate risk. In 1952, Harry Markowitz published his seminal paper,Portfolio Selection , in which he showed how to combine risky assets into efficient portfolios that yield the highest expected return for a given level of risk. [...]better data and greater computational power will enable researchers to produce solutions that are less reliant on simplified models, which though elegant, may not always be the most accurate representation of reality. While it has not been unusual for academics to migrate from academia to industry, some have recently returned to academia with new insights grounded in real-world experience. [...]many academics participate in industry as board members, consultants, or as part-time professionals in industry enterprises.