Linked by the "transforming influence" he has had on their lives and careers, more than 50 former students recently surprised MIT Sloan School of Management Professor of Financial Economics Stephen A. Ross by unveiling a major new prize in his name to honor outstanding papers in his field.
In more than 35 years of research and teaching, Ross has had a major impact on the field of finance. Among other things, he is the inventor of the Arbitrage Pricing Theory and a pioneer in the area of financial derivatives and interest rate models. He is the co-author of "Corporate Finance," now in its eighth edition.
After a fundraising drive among former Ross students that far exceeded the organizers' goals, the first Stephen A. Ross Prize in Financial Economics will be awarded by the end of 2008 by the newly created nonprofit Foundation for Advancement of Research in Financial Economics. In only about a year of fundraising, 50 former Ross students, who now teach at such institutions as MIT, Yale, the University of Chicago, Stanford and the University of Pennsylvania, together donated more than $617,000 toward endowing the prize. After a second phase of fundraising within the academic and investment communities, the foundation expects to be able to award a prize of at least $100,000 every two years. In keeping with the foundational nature of Ross' research, the prize-winning publication will either develop or rigorously test a theory pertaining to financial economics.
In addition to the Ross prize, McGraw-Hill/Irwin, the publisher of Ross' hugely popular textbook, is honoring Ross with the publication of "Stephen A. Ross, Mentor: Influence through Generations," a collection of papers by Ross' students. The volume is edited by Mark Grinblatt, another former Ross student.