Finance pp 1-34 | Cite as


  • Stephen A. Ross
Part of the The New Palgrave book series (NPA)


Finance is a subfield of economics distinguished by both its focus and its methodology. The primary focus of finance is the workings of the capital markets and the supply and the pricing of capital assets. The methodology of finance is the use of close substitutes to price financial contracts and instruments. This methodology is applied to value instruments whose characteristics extend across time and whose payoffs depend upon the resolution of uncertainty.


Asset Price Option Price Financial Economic Risky Asset Call Option 
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© Palgrave Macmillan, a division of Macmillan Publishers Limited 1989

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  • Stephen A. Ross

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