Inventing finance

Many leaders in the field consider MIT Sloan the birthplace of modern finance. Pioneers like Fischer Black, John Cox, and Stewart C. Myers, as well as Nobel laureates Paul Samuelson, Robert C. Merton, Myron Scholes, and Franco Modigliani, all belong or have belonged to the MIT Sloan Finance Group, a major force of change in the industry.

Formed long before other business schools recognized finance as a distinct field of study, the MIT Finance Group is responsible for many of the research breakthroughs that have shaped finance theory and practice over the last 40 years — and continue to do so today:

• The Black-Scholes-Merton derivative-pricing model

• The Modigliani-Miller theorems on corporate financing and evaluation

• The Cox-Ingersoll-Ross model of the term structure of interest rates

Building on pathbreaking work in market efficiencies, dynamic portfolio choice, and long-run risk management, members of the MIT Sloan faculty continue to push the frontiers of finance. They are advancing the field of financial economics while generating innovations and leading-edge management practices critical for leadership in today’s complex global economy. MFin students have front-row access to their latest research. 

Faculty currently teaching in the MFin program:

Paul Asquith
Gordon Y Billard Professor of Finance
Paul Asquith is a media source for the field of corporate finance and control, including mergers, dividend policy, financial distress, and market efficiency. Asquith has been awarded the Teaching Excellence Award thirteen times.

Nittai Bergman
Associate Professor of Finance
Nittai Bergman focuses on the ways in which financial frictions driven by agency costs impede the ability of firms to raise capital, the methods firms use to alleviate these frictions, and the real effects implied by the residual frictions.

Hui Chen
Jon D. Gruber Career Development Professor in Finance
Hui Chen's recent research projects include application of business-cycle models to explain corporate financing behavior and corporate bond pricing, and analysis of the effects of incomplete markets on entrepreneurial financing and investments.

John Cox
Nomura Professor of Finance
John Cox is an inventor of the Cox-Ross-Rubinstein model for option pricing, as well as of the Cox-Ingersoll-Ross model for interest rate dynamics. He was named 1998 International Association of Financial Engineers Financial Engineer of the Year .

Xavier Giroud
Assistant Professor of Finance
Xavier Giroud’s most recent research examines how proximity between corporate headquarters and plants affects plant-level investment and productivity.

Rajkamal Iyer
Assistant Professor of Finance
Rajkamal Iyer’s recent research projects include examining the factors that mitigate the depositor incentive to run on banks and examining how market participants overcome frictions in contracting.

Leonid Kogan
Nippon Telegraph & Telephone Professor of Management
Leonid Kogan, a research fellow of the National Bureau of Economic Research, won the FAME Research Prize, the Smith Beeden Prize, and the Crowell Memorial Prize. His research interests include asset pricing theory, macro-finance, empirical asset pricing, and financial engineering.

Mark P. Kritzman
Senior Lecturer, Finance
Mark P. Kritzman is president and CEO of Windham Capital Management, LLC. He also serves as a senior partner of State Street Associates. Besides teaching financial engineering, he serves on several editorial and research boards, and is the author of six popular books on finance.

Andrew W. Lo
Charles E. and Susan T. Harris Professor of Finance
Winner of multiple awards, a Guggenheim Fellow, and a research associate of the National Bureau of Economic Research, Andrew W. Lo is a leading authority on hedge funds. He proposed the Adaptive Market Hypothesis. 

Deborah J. Lucas
Professor of Finance
Deborah J. Lucas is a research associate of the National Bureau of Economic Research and a member of the National Academy of Social Insurance. She also has been chief economist of the Congressional Budget Office; senior staff economist at the Council of Economic Advisers; and was a member of the Social Security Technical Advisory Panel.

Andrey Malenko
Assistant Professor of Finance
Andrey Malenko focuses on corporate finance, applying option pricing to real investment analysis, and financial auctions.

Paul Mende
Lecturer of Finance

Robert C. Merton
School of Management Distinguished Professor of Finance
A member of the U.S. National Academy of Sciences since 1993, Merton is an author of the Black-Sholes-Merton model for which he won a Nobel Prize in 1997.

Konstantin Milbradt
Assistant Professor of Finance
Konstantin Milbradt's research interests are in financial economics, asset pricing, and financial intermediation. His recent work examines how marking-to-market and marking-to-model rules impact the investment and trading decisions of financial institutions.

John Minahan
Senior Lecturer, Finance
Minahan is head of the finance track of the MBA program and acting associate director of the Master of Finance program. Immediately prior to joining the MIT Sloan faculty in 2010, he was a senior investment strategist and director of research at NEPC, LLC, an institutional investment consulting firm.

Stewart C. Myers
Robert C. Merton (1970) Professor of Financial Economics
Stewart C. Myers, a research associate of the National Bureau of Economic Research, is co-author of the widely used textbook Principles of Corporate Finance, now in its 10th edition. He is credited with coining the term “real option” in relation to corporate finance, a measure of his influence.

Jun Pan
School of Management Distinguished Professor of Finance
Jun Pan studies the impact of rare events on financial markets, as well as their implications for asset allocation. Her work also explores the informational transmission across the stock and options markets. Recently, her work has been focused on the credit market, including credit derivatives and the corporate bond market.

Stephen A. Ross
Franco Modigliani Professor of Financial Economics
Known for the development of the arbitrage pricing theory, as well as for his role in developing the binomial options pricing model known as the Cox-Ross-Rubinstein model, and the creation of the Cox-Ingersoll-Ross model for interest-rate dynamics, Stephen A. Ross posed the fundamental financial concept of risk-neutral pricing. A Fellow of the Econometric Society and a member of the American Academy of Arts and Sciences, he is the co-author of a widely used textbook on corporate finance.

Antoinette Schoar
Michael M. Koerner (1949) Professor of Entrepreneurship
Antoinette Schoar, winner of the Ewing Marion Kauffman Prize for “Distinguished Research in Entrepreneurship,” and a Rensselaer Polytechnic Prize as a “Rising Star in Finance,” is a renowned expert in corporate finance, entrepreneurship, and organizational economics.

Adrien Verdelhan
Assistant Professor of Finance
Adrien Verdelhan's work shows when and why exchange rates are risky, thus shedding light on the most well-known and puzzling currency trading strategy: the carry trade. In his most recent work, he estimates the compensation for disaster risk embedded in currency markets and the amount of predictability in currency risk premia and exchange rates.

Jiang Wang
Mizuho Financial Group Professor
Jiang Wang, a research associate of the National Bureau of Economic Research since 1997, is twice winner of the Smith Breeden Prize. He also has won the New York Stock Exchange award, the FAME Research Prize, and the Leo Melamed Prize. He directs various finance associations and councils.

SLOAN FELLOW Getting serious about going global
"I had interviews and visited other business schools, and it’s nothing like the environment that we have here at MIT Sloan."
Abner Oliviera
G-LAB: INTERGRUPO, COLOMBIA Growing a business by cultivating relationships

"The relationships that we forged helped us to turn out a better project. We were able to test our hypotheses with the people that we spoke with every single day. And really, I think the friendships that you develop really propel the work that you’re doing."

Ramy Hakim
INDIA LAB: EDUCATIONAL ENHANCEMENT Creating employable workers to boost the economy

“I knew about American business, but not enough about what’s really become a global economy. … You can read about it all you want, but there’s no substitute for being there and seeing the context and seeing how completely different these [other countries] are.”

Ted Chan
G-LAB: AIDS IN TANZANIA Striving for economic empowerment

“Because of the diversity of our backgrounds, when we hit the ground in Tanzania it almost was a natural play where different people assume different roles.”

Krishna Venugopalan
RETAIL AND CONSUMER GOODS Luxury beauty and the multicultural consumer
"The goal of the Retail and Consumer Goods Club is to provide networking opportunities for students at MIT Sloan, and to educate students about different functions within the retail and CPG space. We bring in executive-level speakers to educate our community on this topic."
Nga Phan
MBA, co-president of Retail and Consumer Goods Club
G-LAB, KUALA LUMPUR Assessing the future of the Smart Card
"You have to manage what you can deliver for the company and what the company is expecting. The bottom line is that the CEOs of those companies want results. Even though we have to work five months in a row with the project, we have to deliver. This experience is more pragmatic than academic. It's a good opportunity to match those two worlds."
Camilo Syllos
INSTITUTE FOR WORK AND EMPLOYMENT RESEARCH Adapting to the changing nature of work

“We’re very interdisciplinary. Among the faculty in the group are an economist, a political scientist, a sociologist, and an industrial relations specialist. We’ve always made a big effort to be open to a variety of perspectives, but also to go beyond being open to them, to want to bring them in, because it makes for a richer environment.”

Thomas Kochan
Co-director, IWER
MFIN STUDENT TAKE Collective Brainpower

"The classroom itself is filled with so much collective brain power . . . it's obvious that I'm caught up in a room full of 124 of the brightest, most curious people from around the world."

Tiffany Wetherell
G-LAB: WARMBATHS HOSPITAL, SOUTH AFRICA Improving staffing at a maternity ward

“I can honestly say that when I was planning on coming to business school I never thought that witnessing the birth of a child would be included in the education. It was definitely an experience.”

Kelsey McCarty
G-LAB: MERCY CORPS, INDONESIA Using business principles to address malnutrition

“The conditions in the neighborhoods we were visiting were different than what we realized before getting there. Beyond that, what was surprising was that there weren’t surprises!”

Libby Putman
S-LAB: JAKARTA WATERSHED Combating a clean water crisis

“You could talk about watershed management and conservation of energy all you want. But until you put numbers to it and financial analysis to it, you’re not going to get much done. I came to business school to speak that language, speak with people in terms of numbers, financial numbers so that I can get projects done.”

Ian Lavery
G-LAB, RAS RESORT, INDIA Marketing in Mumbai
"The project was really interesting because the scope changed a lot. We started focusing in one goal, then we changed to another, then we changed to another, all before we even left Cambridge."
Gerardo Guzman
SWITZER FELLOWSHIP WINNER JASON JAY Focusing on environmental research and leadership

 “I love being in a place that is such a nexus of people and ideas — people coming to learn something new and to define themselves. Being a part of that process is a real honor and a real gift.”

Jason Jay
Lecturer, Sustainability, MIT Sloan
G-LAB: NAM MEE BOOKS, THAILAND Helping a book publisher mature

“It was really rewarding that they wanted to know what we thought. We left there being fairly certain that they will do some of the things that we suggested.”

Lia Cavalcante
INDIA LAB: BANGALORE Working toward market expansion

“These companies are really excited to work with MIT students.They reach out to the community to set up these projects and are great to work with. They give us access to all their resources and are very open to us.”

Katie Baron
MIT LEADERSHIP CENTER Changing views of leadership

“We are very much an action-learning environment. The way to learn leadership is not only through reading cases, not only through learning theory — in fact we don’t want people to regurgitate the theory. We want people to take theory and to live it, use it.”

Deborah Ancona
Faculty Director, MIT Leadership Center
LEADERS FOR GLOBAL OPERATIONS Connecting management and technology
“We are preparing leaders to run the world’s operations companies. And those leaders are at the cutting edge of both management and technology.”
Don Rosenfield
Senior lecturer and director of the Leaders for Global Operations
MSTIR MIT Sloan Teaching Innovations Resources
"MIT is not only a first-class institution in studying entrepreneurship, but in creating it and fostering it. A huge number of companies have emerged from MIT, not just MIT’s science and engineering schools, but also from collaborative projects between the science and engineering and the Sloan school."
John D. Sterman
Jay W. Forrester Professor of Management
G-LAB: PRIVATE HEALTH CARE IN AFRICA Defining growth at a for-profit clinic

“At MIT Sloan you have a lot of opportunities to explore entrepreneurship. Especially in a place like Kampala where you have a lot of development, entrepreneurship can be very exciting.”

Anne Reilly
CENTER FOR INFORMATION SYSTEMS RESEARCH Bringing people and machines together

“The concept behind enterprise architecture is that you have all these machines, you have all these business processes, you have all these people doing things, how do you make sure they all come together and achieve business objectives that make you more competitive.”

Jeanne W. Ross
Director and Principal Research Scientist, CISR
$100K 2010 WINNERS: C-CRETE TECHNOLOGIES Reducing the environmental impact of concrete

“One of the reasons I came to Sloan was because I wanted to be at a top MBA institution worldwide. But I also wanted access to working with the latest innovations and the highest technology that was coming out of the MIT labs.”

Natanel Barookhian
COURAGE AND STRENGTH Supporting a student with breast cancer
"The Sloan community really rallied around me in a way that I totally didn’t anticipate. … It was just really nice to be a part of a community that I was totally comfortable in and felt completely supported by."
Kyle Maner
SLOAN FELLOW Merging disciplines for climate change
"I needed to get a better understanding of the interaction of management and technology. And I think MIT is an obvious place for that. There’s probably no better place in the world [for learning] how technology and management interact."
Pascal Marmier

“As the world begins to rebuild its financial infrastructure from the ashes of this economic crisis, I believe MIT is primely positioned to play a leadership role in shaping the future through its research and educational programs.”

- Robert C. Merton
School of Management Distinguished Professor of Finance