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Capital Ideas

The Improbable Origins of Modern Wall Street
in: Investing
Summary:

The book traces the evolution of financial theories and the development of investment strategies that shaped modern Wall Street, highlighting the contributions of influential economists and their groundbreaking ideas. It delves into the history of how academic insights were applied to the financial industry, revolutionizing the way investors assess risk and optimize portfolios.

Key points:

1. Rational Expectations Theory: People make decisions using logic, information, and experience. In finance, this means investors use all information to price securities accurately, supporting the idea that markets are efficient.

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