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MCP Premium: Standing on the Shoulders of Giants

Users of our software benefit ultimately from the education and research of great minds like these men below. MCP Premium Software doesn't claim to have invented any new or revolutionary analysis methods. We have simply taken the time to tap into the wealth of knowledge and study the brilliant strategies left to us by 'Giants' in the financial sciences, and applied it to analysis for equity indexed annuity credit methods.

If you sell the FIA or manage ETF portfolios as part of a retirement investment or savings plan, you should be using MCP Premium software!

 

Burton G. Malkiel, 1932 -

 

Harry M. Markowitz, 1927-

Photo:  Burton G. Malkiel

  • Markets are Efficient
  • Index Investing is Superior

Dr. Burton G. Malkiel is currently the Chemical Bank Chairman’s Professor of Economics at Princeton University, where he has long held professorships in economics and was also chairman of the Economics Department. He is a past appointee to the President’s Council of Economic Advisors and he currently serves or has served on the boards of several financial corporations. He is a past president of the American Finance Association and is a member of the American Economic Association.

Dr. Malkiel holds a B.A. and MBA degree from Harvard and a Ph.D. degree from Princeton Universities and began his career in the investment banking department of Smith Barney & Co.

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Harry M. Markowitz

  • Efficient Diversification

  • Quantify Risk vs. Return

Dr. Harry Markowitz's primary contribution to financial science consisted of developing a theory of "portfolio choice," which allows investors to analyze risk as well as their expected return - a theory which evolved into a foundation for further research in financial economics.

Dr. Markowitz showed that the complicated and multidimensional problem of portfolio choice is reduced to a conceptually simple two-dimensional problem - known as mean-variance analysis.

Dr. Markowitz earned his Ph.D. from the Univ. of Chicago, in 1954. Dr. Markowitz shared the Nobel memorial prize in 1990 with William F. Sharpe and Merton H. Miller.

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Monte Carlo Simulation

 

William F. Sharpe, 1934 -

Ulam, Feynman, & von Neumann

circa The Manhattan Project

Stan Ulam, 1909– 1984

While Ulam was at Los Alamos solving the problem of how to initiate fusion in the hydrogen bomb, he developed the 'Monte-Carlo method' which searched for solutions to mathematical problems using a statistical sampling method with random numbers. His method is widely used today in solving mathematical problems using statistical sampling. He remained at Los Alamos until 1965 when he was appointed to the chair of mathematics at the University of Colorado. At the time of his death he was professor of biomathematics at the University of Colorado.

Richard Feynman, 1918 - 1988

Feynman worked on the atomic bomb project first at Princeton University and then at Los Alamos. In 1945, Feynman was appointed as a professor of theoretical physics at Cornell University. In 1950 Feynman became professor of theoretical physics at the California Institute of Technology, where he remained for the rest of his career. He was awarded the Nobel Prize in 1965.

John von Neumann, 1903 - 1957

John von Neumann quickly perceived the application of computers to applied mathematics for specific problems. He became one of the original six mathematics professors (with J W Alexander, A Einstein, M Morse, O Veblen, and H Weyl) in 1933 at the newly founded Institute for Advanced Study in Princeton, a position he kept for the remainder of his life. He brought together the needs of the Los Alamos National Laboratory (and the Manhattan Project).

 

William F. Sharpe

  • Capital Asset Pricing Model (CAPM), Beta, Sharpe Ratio

Along with Markowitz' portfolio model, the CAPM has become the framework in textbooks on financial economics throughout the world. Dr. Sharpe is also a proponent of Monte Carlo simulations for retirement planning "forecasts".

Important examples of areas where the CAPM and its beta coefficients are used routinely, include calculations of costs of capital associated with investment and takeover decisions; estimates of costs of capital as a basis for pricing in regulated public utilities; and judicial inquiries related to court decisions regarding compensation to expropriated firms whose shares are not listed on the stock market. The CAPM is also applied in comparative analyses of the success of different investors.

Dr. Sharpe earned his Ph.D. in Economics in 1961 from UCLA. He shared the Nobel memorial prize in 1990 with Harry Markowitz and Merton H. Miller. Dr. Sharpe is currently the STANCO 25 Professor of Finance, Emeritus, at Stanford University's Graduate School of Business.

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