William Sharpe and Jack Treynor developed this model, which uses categories of "non-diversifiable risk" and "risk-free" assets.
This formalism was refined to incorporate continuous-time data by Douglass Breeden, who noted that a maximum value in it could be achieved if one assumes that it incorporates "zero-sum supplies." A momentum term and two other variables were added to this formalism to derive the Carhart Model. Work inspired by Harry Markowitz suggests that if certain quantities in this theory are optimized, then those quantities will comprise the "efficient frontier." A modification to this model that uses the Bellman Equation to optimize one of its variables as a Wiener Process was developed by Robert Cox (*) Merton. Two variables to this model were added by Fama and French to create-their three-factor model, who argued that the quantity beta in it did not match real-world variation. William Sharpe and Jack Treynor developed this model, which uses categories of "non-diversifiable risk" and "risk-free" assets. For 10 points, name this model that is used to analyze financial portfolios.
This formalism was refined to incorporate continuous-time data by Douglass Breeden, who noted that a maximum value in it could be achieved if one assumes that it incorporates "zero-sum supplies.
Capital Asset Pricing model [or CAPM; prompt on Fama-French three factor model]  