Finances!

            Finance is the study of money and how it is invested, acquired, and saved. You would think that with money being around for as long as it has, that finance would be right there with it. Strangely, finance emerged around World War II, but its roots go back centuries. Back then bankers were “moneychangers” and they even had financers. So where did finance come from and why is it so popular today?

            The main scientific characteristics of finances came from the calculations of risk. Now it has become a science that demands different experiments and equations that account for objectives, accuracy, repeatability, and many other factors. Both then and now “versions” of finance derived from different equations stemming from many different men. One of the most popular models used in finance is called the Gordon model. This model helps to determine the value of stocks which, in this day, is extremely important, especially to big businesses. Another popular model is the capital asset pricing model which helps determine the returns on securities through time valve of money and any risks associated. Both of these models have helped to determine the price of stocks which is used by big businesses and stock brokers all over the nation (Peterson 447).

            Even though financing is centuries old, most of the calculating progress has been very recent. One man, Louis Bachelier, was the first to address the problem of assigning different prices to different options. Bachelier eventually developed a model that, even though was unrealistic, helped to develop another model that was more precise. This model was developed by Einstein and Norbert Wiener after refining the Bachelier model. The equation called Brownian motion was extremely important when it came to relation option pricing. The equation was very complicated but included volality, shift in price, shift in time, and the rise/fall of the price. Together three men helped develop the model which is now commonly used to help determine prices of stocks.

            Finance is a very difficult subject. It includes money, prices, fluctuations, chance, and many more unpredictable things. However many men have made a name for themselves by helping to come up with equations to determine ways to put a price on future objects. These men have changed the way many people see money and I think they have changed the way the stock business runs. These men have “carved a niche for themselves” when it comes to finances, and I’m sure many people thank them.