If you pick up a copy of Theory of Valuation,1 and I suggest that you do, the first thing likely to impress you is the length of the editors' last names (26 letters in total). After getting over that, you will probably turn to the table of contents to see which of your friends or mentors are represented. If you are like me, you might be embarrassed that you had not yet read one (I will not say which one in my case), or perhaps more, of these classics, and you might feel that there are one or more pieces that might have been added. Perhaps your choices would include Harrison and Kreps' (1979) martingale characterization of security prices or Arrow's (1953) paper on “The Role of Securities in the Optimal Allocation of Risk Bearing,” (still required reading for doctoral finance...

Article PDF first page preview

Article PDF first page preview
Article PDF first page preview
You do not currently have access to this article.