Fina4312: Advanced Financial Management Fall 2013-14 Quiz #3 Name: Samar Al-Zayer ID: 201000247 Instructor: Dr.

Shah Chowdhury

Franco Modiglian
Born in Rome, Modigliani left Italy in 1939 because of his Jewish origin and antifascist views. He first went to Paris and then to the United States. From 1942 to 1944, he taught at Columbia University and Bard College as an instructor in economics and statistics. In 1944, he obtained his D. Soc. Sci. From the New School for Social Research working under Jacob Marschak. In 1946, he became a naturalized citizen of the United States, and in 1948, he joined the University of Illinois at Urbana-Champaign faculty. When he was a professor at the Graduate School of Industrial Administration of Carnegie Mellon University in the 1950s and early 1960s, Modigliani made two pathbreaking contributions to economic science:

Along with Merton Miller, he formulated the important ModiglianiMiller theorem in corporate finance (1958). This theorem demonstrated that under certain assumptions, the value of a firm is not affected by whether it is financed by equity (selling shares) or debt (borrowing money).

He was also the originator of the life-cycle hypothesis, which attempts to explain the level of saving in the economy. Modigliani proposed that consumers would aim for a stable level of consumption throughout their lifetime, for example by saving during their working years and spending during their retirement.

In 1962, he joined the faculty at MIT, achieving distinction as an Institute Professor, where he stayed until his death. In 1985 he received MIT's James R. Killian Faculty Achievement Award.

Modigliani also co-authored the textbooks, "Foundations of Financial Markets and Institutions" and "Capital Markets: Institutions and Instruments" with Frank J. Fabozzi of Yale School of Management. In the 1990s he teamed up with Francis Vitagliano to work on a new credit card, and he also helped to oppose changes to a patent law that would be harmful to inventors. Modigliani was a trustee of the Economists for Peace and Security. A collection of Modigliani's papers is housed at the Rubenstein Library at Duke University. For many years, he lived in Belmont, Massachusetts; he died in Cambridge, Massachusetts.

Robert Alexander Mundell

Robert Alexander Mundell, CC (born October 24, 1932) is a Nobel Prize-winning Canadian economist. Mundell is a professor of economics at Columbia University and the Chinese University of Hong Kong. He received the Nobel Memorial Prize in Economics in 1999 for his pioneering work in monetary dynamics and optimum currency areas. Mundell is known as the "father" of the euro, as he laid the groundwork for its introduction through this work and helped to start the movement known as supply-side economics. Mundell is also known for the MundellFleming model and MundellTobin effect. Mundell was born in Kingston, Ontario, Canada. He earned his BA in Economics at the University of British Columbia in Vancouver, Canada, and his MA at the University of Washington in Seattle. After studying at the University of British Columbia and at The London School of Economics in 1956, he then attended the Massachusetts Institute of Technology (MIT), where he obtained his PhD in Economics in 1956. In 2006 Mundell earned a Doctor of Laws degree from the

University of Waterloo in Canada. He was Professor of Economics and Editor of the Journal of Political Economy at the University of Chicago from 1965 to 1972, Chairman of the Department of Economics at the University of Waterloo 1972 to 1974 and since 1974 he was Professor of Economics at Columbia University. He also held the post of Repap Professor of Economics at McGill University. Since 1974 he has been a professor in the Economics department at Columbia University; since 2001 he has held Columbia's highest academic rank University Professor. After completing his post-doctoral fellowship at the University of Chicago in 1957, he began teaching economics at Stanford University, and then at Paul H. Nitze School of Advanced International Studies in Johns Hopkins University during 19591961.[1] In 1961, he went on to staff the International Monetary Fund. Mundell returned to academics as professor of economics at the University of Chicago from 1966 to 1971, and then served as professor during summers at the Graduate Institute of International Studies in Geneva until 1975. In 1989, he was appointed to the post of Repap Professor of Economics at McGill University. In the 1970s, he laid the groundwork for the introduction of the euro through his pioneering work in monetary dynamics and optimum currency forms for which he won the 1999 Nobel Prize in Economics. During this time he continued to serve as an economic adviser to the United Nations, the IMF, the World Bank, the European Commission, the Federal Reserve Board, the United States Department of Treasury and the governments of Canada and other countries. He is currently the Distinguished Professor-at-Large of The Chinese University of Hong Kong. Among his major contributions are:

Theoretical work on optimum currency areas. Contributions to the development of the euro.

Helped start the movement known as supply-side economics. Historical research on the operation of the gold standard in different eras. Predicted the inflation of the 1970s. MundellFleming model. MundellTobin effect.