John Hull
John Hull
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Full Name and Common Aliases
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Full Name: John Frederick Hull
Common Aliases: None noted.
Birth and Death Dates
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Born on October 30, 1929, in England, United Kingdom
Passed away on March 24, 2015
Nationality and Profession(s)
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Nationality: British
Profession(s): Economist, Academic, Author
John Hull was a renowned economist with a distinguished career that spanned over five decades. He is best known for his work in the fields of economics, finance, and risk management.
Early Life and Background
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Growing up in England during the tumultuous years preceding World War II had a profound impact on John's early life. The economic challenges faced by his country during this period likely influenced his future academic pursuits in economics. Hull began his academic journey at Christ's College, Cambridge, where he earned his undergraduate degree in Economics.
Major Accomplishments
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John Hull's extensive contributions to the field of finance are numerous and significant. His pioneering work on interest rate derivatives has had a lasting impact on the development of modern financial markets. He is also credited with introducing various concepts, including the concept of credit risk, which remains an essential component of risk management in finance.
Notable Works or Actions
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John Hull's academic output was prolific and diverse. Some of his most notable works include:
Options, Futures, and Other Derivatives (1989): This seminal textbook on derivatives markets has become a standard reference for professionals and academics alike.
Risk Management and Financial Institutions (1995): In this book, Hull examined the relationship between risk management and financial institutions, providing insights into managing credit risk.
Impact and Legacy
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John's influence extends beyond his academic contributions to the world of finance. He has mentored numerous students and professionals throughout his career, shaping the next generation of economists and financial experts.
Why They Are Widely Quoted or Remembered
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John Hull is widely quoted and remembered for his thought-provoking insights into the complexities of modern finance. His expertise in risk management and derivatives has made him an authority on these subjects, and his writings continue to be sought after by professionals and academics alike.
With a career spanning over five decades, John Hull's legacy as a respected economist and academic is cemented. His contributions to the field of finance have left an indelible mark, ensuring that his work continues to inspire future generations.
Quotes by John Hull
The HoLee model was the first term structure model. I remember reading their paper soon after it was published and as it was fairly different from many of the other papers that I had read, I had to read it quite a few times. I realized that it was a really important paper.
If each of your time steps is one week long, you are not modeling the stock price terribly well over a one-week time period, because you are saying that there are only two possible outcomes.
In the interest rate area, traders have for a long time used a version of what is known as Black's model for European bond options; another version of the same model for caps and floors; and yet another version of the same model for European swap options.
Alan White and I spent the next two or three years working together on this. We developed what is known a stochastic volatility model. This is a model where the volatility as well as the underlying asset price moves around in an unpredictable way.
Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get the average volatility right. It makes a big difference as far as hedging is concerned.
We concluded that you cannot rely on delta hedging alone. It sounds simplistic to say that now, but back then, this was the sort of thing people were only just beginning to realize.
Our research led on to other things, such as the fact that exchange rates are not lognormally distributed.
Our tree is actually a tree of the short-term interest rate. The average direction in which the short-term interest rate moves depends on the level of the rate. When the rate is very high, that direction is downward; when the rate is very low, it is upward.
