Eugene Fama

University of Chicago Booth School of Business

Eugene Francis Fama is an American financial economist at the University of Chicago Booth School of Business, widely regarded as the father of modern finance, who received the 2013 Nobel Memorial Prize in Economic Sciences jointly with Robert Shiller and Lars Peter Hansen. Fama developed and empirically tested the efficient market hypothesis (EMH), which posits that asset prices fully reflect all available information. He introduced the categorization of markets into weak, semi-strong, and strong forms of efficiency, and conducted some of the earliest rigorous empirical tests of stock price behavior and mutual fund performance. His three-factor asset pricing model, developed with Kenneth French, extended the CAPM by adding size and value factors and became the dominant framework for measuring portfolio performance and explaining cross-sectional variation in stock returns. Fama's work underpins index investing, passive asset management, and modern portfolio construction. He is co-founder and director of Dimensional Fund Advisors, a major asset management firm whose approach directly implements his research.