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70-704: Notable Chicago Booth alumni include James O. McKinsey , founder of McKinsey & Company ; Susan Wagner , co-founder of Blackrock ; Eric Kriss , co-founder of Bain Capital ; Satya Nadella , current CEO of Microsoft ; and other current and former CEOs of Fortune 500 companies such as Allstate Insurance , Booz Allen Hamilton , Cargill , Chevron , Chipotle , Credit Suisse , Dominos , Goldman Sachs , IBM , Morgan Stanley , Morningstar , PIMCO , Reckitt Benckiser , and Starbucks . The University of Chicago Booth School of Business traces its roots to 1898 when university faculty member James Laurence Laughlin chartered

140-727: A 30-page system that McKinsey created in 1931 to evaluate a company's finances, organization, and competitiveness. These books were considered by reviewers to be "rigidly and boldly scientific as never before". McKinsey also became president of the American Association of University Instructors in Accounting in 1924 and helped establish its journal The Accounting Review . In 1925, McKinsey founded his own consultancy firm James O. McKinsey & Company , in Chicago, where he served as senior partner until 1935. Although he

210-428: A broad range of subfields exists within finance. Asset- , money- , risk- and investment management aim to maximize value and minimize volatility . Financial analysis assesses the viability, stability, and profitability of an action or entity. Some fields are multidisciplinary, such as mathematical finance , financial law , financial economics , financial engineering and financial technology . These fields are

280-860: A campus in Hong Kong , located in the Hong Kong Jockey Club University of Chicago Academic Complex . Chicago Booth offers Full-time, Part-time (Evening and Weekend) and Executive MBA programs. Starting in the 2024–2025 academic year, Booth intends to offer a Master in Finance and Master in Management degrees for recent college graduates who studied humanities, arts, social sciences, biological sciences, or physical sciences in college, and are interested in jobs that value business-oriented skills and knowledge. The university also educates future academics, with graduate programs offering

350-610: A community of over 49,000 members and is supported by 60+ alumni clubs worldwide. Alumni include Satya Nadella , Jon Corzine , Peter G. Peterson , Philip J. Purcell , Todd Young , Howard Marks , Megan McArdle , John Meriwether , and Susan Wagner . Chicago Booth currently publishes three academic journals: Chicago Booth Review is a magazine devoted to business research, particularly research conducted by Chicago Booth's own faculty. In addition to covering new findings in finance, behavioral science, economics, entrepreneurship, accounting, marketing, and other business-relevant subjects,

420-431: A high degree of computational complexity and are slow to converge to a solution on classical computers. In particular, when it comes to option pricing, there is additional complexity resulting from the need to respond to quickly changing markets. For example, in order to take advantage of inaccurately priced stock options, the computation must complete before the next change in the almost continuously changing stock market. As

490-493: A lecturer in accounting at Columbia University from 1920 to 1921. Having written textbooks about accounting and taxes, in 1922 he published his first major work, entitled Budgetary Control. Budgetary Control is regarded as "the first definitive work on budgeting". Additionally, Budgetary Control was written at a time when budgeting was limited to government, not private industry. In his book, McKinsey advocated that companies' performance should be judged by staying within

560-492: A loan or other debt obligations. The main areas of personal finance are considered to be income, spending, saving, investing, and protection. The following steps, as outlined by the Financial Planning Standards Board, suggest that an individual will understand a potentially secure personal finance plan after: Corporate finance deals with the actions that managers take to increase the value of

630-738: A long-term strategic perspective regarding investment decisions that affect public entities. These long-term strategic periods typically encompass five or more years. Public finance is primarily concerned with: Central banks, such as the Federal Reserve System banks in the United States and the Bank of England in the United Kingdom , are strong players in public finance. They act as lenders of last resort as well as strong influences on monetary and credit conditions in

700-414: A mix of an art and science , and there are ongoing related efforts to organize a list of unsolved problems in finance . Managerial finance is the branch of finance that deals with the financial aspects of the management of a company, and the financial dimension of managerial decision-making more broadly. It provides the theoretical underpin for the practice described above , concerning itself with

770-447: A result, the finance community is always looking for ways to overcome the resulting performance issues that arise when pricing options. This has led to research that applies alternative computing techniques to finance. Most commonly used quantum financial models are quantum continuous model, quantum binomial model, multi-step quantum binomial model etc. The origin of finance can be traced to the beginning of state formation and trade during

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840-477: A separate newsletter featuring articles about faculty research. That subsequently evolved into a quarterly magazine, which in 2016 relaunched as Chicago Booth Review . [REDACTED] Media related to University of Chicago Booth School of Business at Wikimedia Commons 41°47′21″N 87°35′44″W  /  41.78917°N 87.59556°W  / 41.78917; -87.59556 James O. McKinsey James Oscar McKinsey (June 4, 1889 – November 30, 1937)

910-492: A set budget. McKinsey followed up Budgetary Control with two more books, Managerial Accounting and Business Administration , in 1924. In Managerial Accounting , McKinsey demonstrated ways that accounting data could reform businesses, for instance financial standards that could determine efficiency of business operations. Business Administration would serve as a precursor to the General Survey Outline,

980-446: A sophisticated mathematical model is required, and thus overlaps several of the above. As a specialized practice area, quantitative finance comprises primarily three sub-disciplines; the underlying theory and techniques are discussed in the next section: DCF valuation formula widely applied in business and finance, since articulated in 1938 . Here, to get the value of the firm , its forecasted free cash flows are discounted to

1050-398: A well-diversified portfolio, achieved investment performance will, in general, largely be a function of the asset mix selected, while the individual securities are less impactful. The specific approach or philosophy will also be significant, depending on the extent to which it is complementary with the market cycle . Risk management here is discussed immediately below. A quantitative fund

1120-482: Is about performing valuation and asset allocation today, based on the risk and uncertainty of future outcomes while appropriately incorporating the time value of money . Determining the present value of these future values, "discounting", must be at the risk-appropriate discount rate , in turn, a major focus of finance-theory. As financial theory has roots in many disciplines, including mathematics, statistics, economics, physics, and psychology, it can be considered

1190-436: Is managed using computer-based mathematical techniques (increasingly, machine learning ) instead of human judgment. The actual trading is typically automated via sophisticated algorithms . Risk management , in general, is the study of how to control risks and balance the possibility of gains; it is the process of measuring risk and then developing and implementing strategies to manage that risk. Financial risk management

1260-444: Is mathematics that is actually important in this new scenario Finance theory is heavily based on financial instrument pricing such as stock option pricing. Many of the problems facing the finance community have no known analytical solution. As a result, numerical methods and computer simulations for solving these problems have proliferated. This research area is known as computational finance . Many computational finance problems have

1330-584: Is now named the Stevens Doctoral Program. Chicago Booth grants "High Honors" to the top five percent of the graduating class and "Honors" to its next 15 percent, based on GPA averages of all MBA graduates from the previous academic year. The school promotes and disseminates research through its centers and institutes; the most significant ones are: Chicago Booth was ranked #1 by both Forbes and The Economist in 2019. U.S. News & World Report ranks Chicago Booth in 2022 and 2023 as

1400-657: Is often indirect, through a financial intermediary such as a bank , or via the purchase of notes or bonds ( corporate bonds , government bonds , or mutual bonds) in the bond market . The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary earns the difference for arranging the loan. A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Investing typically entails

1470-497: Is referred to as "wholesale finance". Institutions here extend the products offered , with related trading, to include bespoke options , swaps , and structured products , as well as specialized financing ; this " financial engineering " is inherently mathematical , and these institutions are then the major employers of "quants" (see below ). In these institutions, risk management , regulatory capital , and compliance play major roles. As outlined, finance comprises, broadly,

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1540-471: Is the branch of economics that studies the interrelation of financial variables , such as prices , interest rates and shares, as opposed to real economic variables, i.e. goods and services . It thus centers on pricing, decision making, and risk management in the financial markets , and produces many of the commonly employed financial models . ( Financial econometrics is the branch of financial economics that uses econometric techniques to parameterize

1610-485: Is the practice of protecting corporate value against financial risks , often by "hedging" exposure to these using financial instruments. The focus is particularly on credit and market risk, and in banks, through regulatory capital, includes operational risk. Financial risk management is related to corporate finance in two ways. Firstly, firm exposure to market risk is a direct result of previous capital investments and funding decisions; while credit risk arises from

1680-400: Is then often referred to as "business finance". Typically, "corporate finance" relates to the long term objective of maximizing the value of the entity's assets , its stock , and its return to shareholders , while also balancing risk and profitability . This entails three primary areas: The latter creates the link with investment banking and securities trading , as above, in that

1750-665: The Bronze Age . The earliest historical evidence of finance is dated to around 3000 BCE. Banking originated in West Asia, where temples and palaces were used as safe places for the storage of valuables. Initially, the only valuable that could be deposited was grain, but cattle and precious materials were eventually included. During the same period, the Sumerian city of Uruk in Mesopotamia supported trade by lending as well as

1820-572: The University of Arkansas , where he obtained his Bachelor of Laws in 1913. In 1914 he studied and taught bookkeeping at the St. Louis University . Next, McKinsey entered the University of Chicago , where in 1916 he obtained his Bachelor of Philosophy and Master of Arts in 1917, both in commerce. McKinsey was then drafted into the United States Army in 1917; he would rise in

1890-446: The managerial application of the various finance techniques . Academics working in this area are typically based in business school finance departments, in accounting , or in management science . The tools addressed and developed relate in the main to managerial accounting and corporate finance : the former allow management to better understand, and hence act on, financial information relating to profitability and performance;

1960-724: The numerical methods applied here. Experimental finance aims to establish different market settings and environments to experimentally observe and provide a lens through which science can analyze agents' behavior and the resulting characteristics of trading flows, information diffusion, and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and therefore prove them, as well as attempt to discover new principles on which such theory can be extended and be applied to future financial decisions. Research may proceed by conducting trading simulations or by establishing and studying

2030-570: The #1 business school in the United States. U.S. News also ranked the school's executive MBA program #1 and its part-time program #1 in the U.S. In 2019, The Economist ranked the school's full-time MBA program as #1 globally. The Economist also ranked Chicago #1 each year from 2012 to 2016 and 2019. The Financial Times Rankings 2019 awarded Chicago Booth third place in Open Executive Education. Poets and Quants ranked

2100-482: The A.M. and Ph.D. degrees in several fields. In addition to conducting graduate business programs, the school conducts research in the fields of finance , economics , quantitative marketing research , and accounting , among others. PhD graduates include Cliff Asness and John Liew, who co-founded money management firm AQR , and Ross Stevens, who founded Stone Ridge Asset Management. In April 2023, Stevens donated $ 100 million to support Chicago Booth's PhD program, which

2170-803: The Charles M. Harper Center in Hyde Park , which houses the school's full-time MBA and Ph.D. programs, and the Gleacher Center in downtown Chicago , which hosts the part-time Evening and Weekend MBA Programs, Chicago-based Executive MBA Program, and Executive Education courses. Chicago Booth also has a campus in London , a short walk from St Paul's Cathedral , hosting the EMBA Program in Europe and Executive Education classes. Lastly, Chicago Booth has

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2240-455: The College of Commerce and Politics, which was intended to be an extension of the school's founding principles of "scientific guidance and investigation of great economic and social matters of everyday importance." The program originally served as a solely undergraduate institution until 1916, when academically oriented research masters and later doctoral-level degrees were introduced. In 1916,

2310-478: The above " Fundamental theorem of asset pricing ". The subject has a close relationship with financial economics, which, as outlined, is concerned with much of the underlying theory that is involved in financial mathematics: generally, financial mathematics will derive and extend the mathematical models suggested. Computational finance is the branch of (applied) computer science that deals with problems of practical interest in finance, and especially emphasizes

2380-501: The behavior of people in artificial, competitive, market-like settings. Behavioral finance studies how the psychology of investors or managers affects financial decisions and markets and is relevant when making a decision that can impact either negatively or positively on one of their areas. With more in-depth research into behavioral finance, it is possible to bridge what actually happens in financial markets with analysis based on financial theory. Behavioral finance has grown over

2450-579: The business's credit policy and is often addressed through credit insurance and provisioning . Secondly, both disciplines share the goal of enhancing or at least preserving, the firm's economic value , and in this context overlaps also enterprise risk management , typically the domain of strategic management . Here, businesses devote much time and effort to forecasting , analytics and performance monitoring . (See ALM and treasury management .) For banks and other wholesale institutions, risk management focuses on managing, and as necessary hedging,

2520-891: The capital raised will generically comprise debt, i.e. corporate bonds , and equity , often listed shares . Re risk management within corporates, see below . Financial managers—i.e. as distinct from corporate financiers—focus more on the short term elements of profitability, cash flow, and " working capital management " ( inventory , credit and debtors ), ensuring that the firm can safely and profitably carry out its financial and operational objectives; i.e. that it: (1) can service both maturing short-term debt repayments, and scheduled long-term debt payments, and (2) has sufficient cash flow for ongoing and upcoming operational expenses . (See Financial management and Financial planning and analysis .) Public finance describes finance as related to sovereign states, sub-national entities, and related public entities or agencies. It generally encompasses

2590-452: The cost of his health. He died of pneumonia on November 30, 1937." Finance Finance refers to monetary resources and to the study and discipline of money , currency , assets and liabilities . As a subject of study, it is related to but distinct from economics , which is the study of the production , distribution , and consumption of goods and services . Based on the scope of financial activities in financial systems ,

2660-456: The discipline can be divided into personal , corporate , and public finance . In these financial systems, assets are bought, sold, or traded as financial instruments , such as currencies , loans , bonds , shares , stocks , options , futures , etc. Assets can also be banked , invested , and insured to maximize value and minimize loss. In practice, risks are always present in any financial action and entities. Due to its wide scope,

2730-461: The economy. Development finance , which is related, concerns investment in economic development projects provided by a (quasi) governmental institution on a non-commercial basis; these projects would otherwise not be able to get financing . A public–private partnership is primarily used for infrastructure projects: a private sector corporate provides the financing up-front, and then draws profits from taxpayers or users. Climate finance , and

2800-672: The excess, intending to earn a fair return. Correspondingly, an entity where income is less than expenditure can raise capital usually in one of two ways: (i) by borrowing in the form of a loan (private individuals), or by selling government or corporate bonds ; (ii) by a corporation selling equity , also called stock or shares (which may take various forms: preferred stock or common stock ). The owners of both bonds and stock may be institutional investors —financial institutions such as investment banks and pension funds —or private individuals, called private investors or retail investors. (See Financial market participants .) The lending

2870-510: The field is referred to as quantitative finance and / or mathematical finance, and comprises primarily the three areas discussed. The main mathematical tools and techniques are, correspondingly: Mathematically, these separate into two analytic branches : derivatives pricing uses risk-neutral probability (or arbitrage-pricing probability), denoted by "Q"; while risk and portfolio management generally use physical (or actual or actuarial) probability, denoted by "P". These are interrelated through

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2940-416: The field. Quantum finance is an interdisciplinary field, in which theories and methods developed by quantum physicists and economists are applied to solve financial problems. It represents a branch known as econophysics. Although quantum computational methods have been around for quite some time and use the basic principles of physics to better understand the ways to implement and manage cash flows, it

3010-410: The firm to the shareholders, the sources of funding and the capital structure of corporations, and the tools and analysis used to allocate financial resources. While corporate finance is in principle different from managerial finance , which studies the financial management of all firms rather than corporations alone, the concepts are applicable to the financial problems of all firms, and this area

3080-565: The first academic business journal (1928), offering the first Executive MBA ( EMBA ) program (1943), and for offering the first weekend MBA program (1986). Students at the school founded the National Black MBA Association (1972), and it is the only U.S. business school with permanent campuses on three continents: Asia (2000), Europe (1994), and North America (1898). In Chicago, the Booth School has two campuses:

3150-451: The first scholarly work in this area. The field is largely focused on the modeling of derivatives —with much emphasis on interest rate- and credit risk modeling —while other important areas include insurance mathematics and quantitative portfolio management . Relatedly, the techniques developed are applied to pricing and hedging a wide range of asset-backed , government , and corporate -securities. As above , in terms of practice,

3220-627: The flows of capital that take place between individuals and households ( personal finance ), governments ( public finance ), and businesses ( corporate finance ). "Finance" thus studies the process of channeling money from savers and investors to entities that need it. Savers and investors have money available which could earn interest or dividends if put to productive use. Individuals, companies and governments must obtain money from some external source, such as loans or credit, when they lack sufficient funds to run their operations. In general, an entity whose income exceeds its expenditure can lend or invest

3290-400: The foundation of business and accounting . In some cases, theories in finance can be tested using the scientific method , covered by experimental finance . The early history of finance parallels the early history of money , which is prehistoric . Ancient and medieval civilizations incorporated basic functions of finance, such as banking, trading and accounting, into their economies. In

3360-712: The fundamental risk mitigant here, investment managers will apply various hedging techniques as appropriate, these may relate to the portfolio as a whole or to individual stocks . Bond portfolios are often (instead) managed via cash flow matching or immunization , while for derivative portfolios and positions, traders use "the Greeks" to measure and then offset sensitivities. In parallel, managers — active and passive — will monitor tracking error , thereby minimizing and preempting any underperformance vs their "benchmark" . Quantitative finance—also referred to as "mathematical finance"—includes those finance activities where

3430-506: The heart of investment management is asset allocation — diversifying the exposure among these asset classes , and among individual securities within each asset class—as appropriate to the client's investment policy , in turn, a function of risk profile, investment goals, and investment horizon (see Investor profile ). Here: Overlaid is the portfolio manager's investment style —broadly, active vs passive , value vs growth , and small cap vs. large cap —and investment strategy . In

3500-808: The job of chair and chief executive, and McKinsey accepted the offer in October 1935. While leading Marshall Field, McKinsey also sat on the boards of Kroger , the Armour Institute of Technology , and other businesses and organizations. For his eponymous company, McKinsey named Andrew Thomas Kearney managing partner of the Chicago office. In 1936, McKinsey was also elected chairman of the American Management Association . The History of Accounting: An International Encyclopedia explained that McKinsey "soon turned Marshall Field's red ink into profit, but he may have done so at

3570-444: The last few decades to become an integral aspect of finance. Behavioral finance includes such topics as: A strand of behavioral finance has been dubbed quantitative behavioral finance , which uses mathematical and statistical methodology to understand behavioral biases in conjunction with valuation. Quantum finance involves applying quantum mechanical approaches to financial theory, providing novel methods and perspectives in

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3640-423: The late 19th century, the global financial system was formed. In the middle of the 20th century, finance emerged as a distinct academic discipline, separate from economics. The earliest doctoral programs in finance were established in the 1960s and 1970s. Today, finance is also widely studied through career -focused undergraduate and master's level programs. As outlined, the financial system consists of

3710-490: The latter half of the twentieth century, the business school was instrumental in the development of the Chicago School of economics , an economic philosophy focused on free-market, minimal government involvement, due to faculty and student interaction with members of the university's influential Department of Economics. Other innovations by the school include initiating the first PhD program in business (1920), founding

3780-427: The latter, as above, are about optimizing the overall financial structure, including its impact on working capital. Key aspects of managerial finance thus include: The discussion, however, extends to business strategy more broadly, emphasizing alignment with the company's overall strategic objectives; and similarly incorporates the managerial perspectives of planning, directing, and controlling. Financial economics

3850-596: The magazine features essays from Chicago Booth faculty and other academics. It is published quarterly in print and several times a week online. Chicago Booth Review is the most recent of several successive vehicles Chicago Booth has used to convey its intellectual capital to an outside audience. Starting in the 1960s, the school published the Selected Papers series, a collection of articles written by faculty members or excerpted from faculty speeches. In 1997, Booth launched Capital Ideas ( ISSN   1934-0060 ) as

3920-444: The present using the weighted average cost of capital for the discount factor. For share valuation investors use the related dividend discount model . Financial theory is studied and developed within the disciplines of management , (financial) economics , accountancy and applied mathematics . Abstractly, finance is concerned with the investment and deployment of assets and liabilities over "space and time"; i.e., it

3990-409: The purchase of stock , either individual securities or via a mutual fund , for example. Stocks are usually sold by corporations to investors so as to raise required capital in the form of " equity financing ", as distinct from the debt financing described above. The financial intermediaries here are the investment banks . The investment banks find the initial investors and facilitate the listing of

4060-618: The ranks from private to lieutenant in the Ordnance Department wand was discharged in 1919. While in the Army, McKinsey believed that the logistics process lacked efficiency. From 1917 to 1920, McKinsey was an instructor and assistant professor of accounting at Chicago. McKinsey became a certified public accountant in Illinois in 1919. In 1920, McKinsey married Alice Louise Anderson; they had two children. McKinsey then became

4130-749: The rate of 20 percent per year. By 1200 BCE, cowrie shells were used as a form of money in China . The use of coins as a means of representing money began in the years between 700 and 500 BCE. Herodotus mentions the use of crude coins in Lydia around 687 BCE and, by 640 BCE, the Lydians had started to use coin money more widely and opened permanent retail shops. Shortly after, cities in Classical Greece , such as Aegina , Athens , and Corinth , started minting their own coins between 595 and 570 BCE. During

4200-724: The related Environmental finance , address the financial strategies, resources and instruments used in climate change mitigation . Investment management is the professional asset management of various securities—typically shares and bonds, but also other assets, such as real estate, commodities and alternative investments —in order to meet specified investment goals for the benefit of investors. As above, investors may be institutions, such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts or, more commonly, via collective investment schemes like mutual funds, exchange-traded funds , or REITs . At

4270-413: The relationships suggested.) The discipline has two main areas of focus: asset pricing and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital; respectively: Financial mathematics is the field of applied mathematics concerned with financial markets ; Louis Bachelier's doctoral thesis , defended in 1900, is considered to be

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4340-584: The school #2 in their 2019 ranking. The Booth school has 177 professors, and includes Nobel laureates Eugene Fama and Richard Thaler and MacArthur Fellow Kevin M. Murphy . Other notable economists at the school include Luigi Zingales and Raghuram Rajan , and former Chairperson of the Council of Economic Advisers , Austan Goolsbee , who is currently on leave as President of the Federal Reserve Bank of Chicago. The Chicago Booth Alumni has

4410-492: The school was renamed the School of Commerce and Administration . Soon after in 1922, the first doctorate program was offered at the school. In 1932, the school was rechristened as the School of Business . The School of Business offered its first Master of Business Administration (MBA) in 1935. A landmark decision was taken by the school at about this time to concentrate its resources solely on graduate programs, and accordingly,

4480-475: The securities, typically shares and bonds. Additionally, they facilitate the securities exchanges , which allow their trade thereafter, as well as the various service providers which manage the performance or risk of these investments. These latter include mutual funds , pension funds , wealth managers , and stock brokers , typically servicing retail investors (private individuals). Inter-institutional trade and investment, and fund-management at this scale ,

4550-623: The three areas of personal finance, corporate finance, and public finance. These, in turn, overlap and employ various activities and sub-disciplines—chiefly investments , risk management, and quantitative finance . Personal finance refers to the practice of budgeting to ensure enough funds are available to meet basic needs, while ensuring there is only a reasonable level of risk to lose said capital. Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance , investing, and saving for retirement . Personal finance may also involve paying for

4620-517: The undergraduate program was phased out in 1942. In 1943, the school launched the first Executive MBA program. The school was renamed to Graduate School of Business (or more popularly, the GSB ) in 1959, a name that it held till 2008. That year alumnus David G. Booth gave the school a gift valued at $ 300 million, and in honor of the gift the school was renamed the University of Chicago Booth School of Business . (Interim dean Douglas J. Skinner) During

4690-446: The use of interest. In Sumerian, "interest" was mas , which translates to "calf". In Greece and Egypt, the words used for interest, tokos and ms respectively, meant "to give birth". In these cultures, interest indicated a valuable increase, and seemed to consider it from the lender's point of view. The Code of Hammurabi (1792–1750 BCE) included laws governing banking operations. The Babylonians were accustomed to charging interest at

4760-635: The various positions held by the institution—both trading positions and long term exposures —and on calculating and monitoring the resultant economic capital , and regulatory capital under Basel III . The calculations here are mathematically sophisticated, and within the domain of quantitative finance as below. Credit risk is inherent in the business of banking, but additionally, these institutions are exposed to counterparty credit risk . Banks typically employ Middle office "Risk Groups" , whereas front office risk teams provide risk "services" (or "solutions") to customers. Additional to diversification ,

4830-667: Was an American accountant , management consultant , professor of accounting at the University of Chicago , and founder of McKinsey & Company . McKinsey was born in 1889 in Gamma, Missouri , son of James Madison McKinsey and Mary Elizabeth (Logan) McKinsey. After attending regular public school, McKinsey initially received training as a teacher at the Warrensburg Teachers College, now University of Central Missouri , where in 1912 he obtained his Bachelor of Pedagogy . McKinsey continued to study law at

4900-685: Was promoted by the University of Chicago to full professor in 1926, because of his business obligations, McKinsey taught only two courses at Chicago starting in 1928. In 1935, Chicago department store Marshall Field & Company retained McKinsey's services to resolve financial difficulties, specifically $ 12 million lost since 1930 and a loan repayment of $ 18 million. After sending 12 consultants to review 752 stores in 32 states, factories, and wholesalers, McKinsey recommended that Marshall Field should limit its business to retail, sell its factories, and end wholesaling. Marshall Field's board offered McKinsey

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