Myron Scholes Biography

Myron Scholes is a Canadian-American economist who won the Nobel Prize for Economic Sciences in 1997. This biography profiles his childhood, life, academic and research career, achievements and timeline.

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Also Known As:
Myron Samuel Scholes
Famous as:
Economist
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Birth Date:
Age:
Sun Sign:
Cancer    Cancer Men
Born in:
Timmins, Ontario, Canada
Spouse/Partner:
Jan Scholes
children:
Anne, Sara
More Facts
education:
University of Chicago, McMaster University
awards:
Nobel Memorial Prize in Economics (1997)

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Myron Scholes is a Canadian-American economist who shared the Nobel Prize for Economic Sciences with American economist Robert C. Merton for his work in finding out a new method to calculate the value of stock derivatives. Scholes and Fischer Black had earlier developed the ‘Black-Scholes Formula’ for calculating the value of stock options. Robert C. Merton elaborated this formula to encompass the calculation of a lot of other things like mortgages and loans. Fischer Black could not receive the prize with others as he had passed away in 1995. Risk premiums could not be calculated properly due to the uncertainty of the price of options at the time of maturity which could either rise or fall. It was difficult to determine the correct price of options at an early stage so that it would not hurt the investors later. The work done by Scholes and Black pioneered new types of financial instruments that made management of risk for investing money in options and derivatives more efficient. Scholes and Black showed with the help of their formula that there was no need to include any risk premium in the price of options as it was already incorporated in the value. This formula is currently used by thousands of investors all over the world for calculating the value of stock options.

Childhood & Early Life
  • Myron S. Scholes was born in Timmins, Ontario, Canada on July 1, 1941. His father was a dentist in Timmins and his mother was the owner of a chain of small departmental stores. He had a younger brother.
  • His family moved to Hamilton from Timmins when he was ten-years-old.
  • His mother instilled the love of business and finance in him from an early age. He started dabbling in stock markets when he was still in high school.
  • After finishing high school he joined the ‘McMaster University’ in Hamilton, Ontario, and graduated in 1962 with a B. A. in economics.
  • He joined the ‘University of Chicago’ and took up computer programming along with other subjects. He earned an MBA degree from the ‘Booth School of Business’ in 1964 and then completed his PhD in 1969 under the supervision of Eugene Fama and Merton Miller.
Career
  • After doing his PhD he joined the ‘Sloan School of Management’ at MIT where he came in contact first with Fischer Black and then with Robert C. Merton. He worked there from 1968 to 1973 during which he became a Professor of Finance.
  • He returned to the ‘University of Chicago’ from 1973 to 1983 but continued working with Black and Merton.
  • In 1981 he paid a visit to the ‘Stanford University’ and joined the faculty of the ‘Business and Law School’ in 1983. He stayed with the university till 1996.
  • In 1990 he served as the President of the ‘American Finance Association’.
  • He became a consultant to ‘Salomon Brothers, Inc’ in 1990 and became its Managing Director later on.
  • He became a principal member and co-founder of an investment firm called ‘Long-Term Capital Management’ in 1994 which got into financial difficulties and had to be bailed out by the ‘Federal Reserve Board’ in 1998. LTCM was liquidated in 2000 and later on he and his partners were implicated in a tax fraud to the tune of almost $106 million dollars in 2005.
  • He became a ‘Frank E. Buck Professor Emeritus of Finance’ at the ‘Stanford Graduate School of Business’ at the ‘Stanford University’ in 1996 where he continues to teach ‘Managing Under Uncertainty’ and ‘The Evolution of Finance’.
  • He was the Chairman of the ‘Platinum Grove Asset Management’ company, and also served on the ‘Dimensional Funds Advisors Board of Directors’, on the ‘American Century Mutual Fund Board of Directors’, on the ‘Chicago Mercantile Exchange Board of Directors’ and on the ‘Cutwater Advisory Board’.
  • He was an ‘Edward Eagle Brown Professor of Finance’ at the ‘University of Chicago’, a ‘Senior Research Fellow’ at the ‘Hoover Institution’, and a Director at the ‘Center for Research in Security Prices’.
  • He became the Chief Investment Strategist of the ‘Janus Capital Group’ in 2014 where he headed the investment team involved in quantitative analysis of hedge funds, risk management and portfolio construction.
  • He is currently the Chairman of the ‘Board of Economic Advisers’ of ‘Stamos Partners’.
Major Works
  • Myron Scholes published his paper ‘The Valuation of Option Contracts and a Test of Market Efficiency’ in collaboration with Fischer black in an economic journal in 1972.
  • He published his paper ‘The Pricing of Options and Corporate Liabilities’ in collaboration with Fischer Black in 1973 and the paper ‘Taxes and the Pricing of Options’ in 1976.
  • His book written in collaboration with Mark A. Wolfson titled, ‘Taxes and Business Strategy: A Planning Approach’ was published in 1992 and the paper ‘Global Financial Markets, Derivative Securities and Systematic Risks’ was published in 1996.
Awards & Achievements
  • Myron Scholes received the Nobel Prize in Economic Sciences in 1997.
  • He received the ‘Innovator of the Year Award’ from the ‘Chicago Mercantile Exchange and ‘The Lifetime Achievement Award’ from the ‘Derivatives Association’.
  • He is a member of the ‘Econometric Society’, the Director of ‘Dimensional Fund Advisors Mutual Funds’ and many more private companies.
  • He served as an Advisor to the ‘Guandong Provincial Government’.
  • He was given honorary doctorate degrees by the ‘University of Paris, France’ in 1989, by the ‘McMaster University, Canada’ in 1990, by the ‘Louvain University, Belgium’ in 1998, and by the ‘Wilfred University, Canada’.
  • He is an Honorary Professor of the ‘Nanjing University, the ‘Nanjing Audit University’ and the ‘Xiamen University’.
Personal Life & Legacy
  • Myron Scholes married Jan Scholes on October 4, 1998. He has two daughters from this marriage - Anne and Sara.
  • He developed a slight defect in his eye during his childhood which was removed later by a corneal transplant at the age of 26.
Trivia
  • Myron Scholes loves sports like golf and skiing which allows him to be outdoors during both summer and winter.

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Article Title
- Myron Scholes Biography
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- Editors, TheFamousPeople.com
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URL
https://www.thefamouspeople.com/profiles/myron-scholes-7778.php
Last Updated
- August 11, 2016
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