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Now Playing : Prof. Myron Scholes, 1997 Nobel Prize Winner in Economic Sciences, Delivers Last Lecture

Description : Myron Scholes, the Frank E. Buck Professor of Finance, Emeritus, delivers a speech as part of the business school's Last Lecture Series. Each year, MBA students invite members of the faculty to deliver a Last Lecture, touching on a topic that is important to the speaker, that sums up an area of research or academic work, or that may be a parting word of advice or inspiration to students. With Robert C. Merton of Harvard Business School, Scholes shared the 1997 Prize. The Royal Swedish Academy of Sciences honored the pair along with the late Fischer Black for "a new method to determine the value of derivatives." The research was first published by Scholes and Black in the Journal of Political Economy in 1973, shortly after the first options exchange opened in Chicago. What has become known as the Black-Scholes options pricing model, a benchmark formula for the valuation of stock options, put a fledgling options market on its feet. Faculty Profile: gsbapps.stanford.edu Recorded: April 13, 2004

License: Creative Commons BY-NC-SA