Sharpe, William Forsyth (1934-…), an American economist, formulated an important theory called the capital asset pricing model (CAPM). This model explains how the price of investments in financial markets reflects both the risks involved and the potential profits to be made. In 1990, Sharpe was awarded a share of the Nobel Prize in economic sciences. He shared the prize with fellow Americans Harry Markowitz and Merton Miller, who also did important work on financial economics.
Sharpe was born in Boston. He enrolled at the University of California in 1951, aiming for a medical degree. But a year later, he changed to studying business administration. In 1956, he joined the Rand Corporation, a research organization that studies defense questions, as an economist. It was there that he met Markowitz. In 1961, Sharpe received a Ph.D. in economics from the University of California at Los Angeles.
Sharpe later taught at the University of Washington in Seattle, the University of California in Irvine, and Stanford University in Palo Alto, California. In 1973, he was appointed Timken Professor of Finance at Stanford. He has also set up a firm of investment consultants. Sharpe acted as a consultant to several major finance corporations. He has been a member of the National Bureau of Economic Research and president of the American Finance Association, an organization that promotes knowledge of finance. Sharpe was active in creating seminars for management professionals worldwide to learn more about investment finance.
