Key facts
- Institutional investors in the 1960s embraced systematic measurement as a discipline.
- Financial economics provided tools to measure investment returns against risk.
- These tools allowed investors to assess risk-adjusted portfolio performance.
- AI accelerates decision-making processes.
During the 1960s, institutional investors began to view systematic measurement as a crucial discipline. Financial economics offered methodologies for quantifying investment returns relative to risk, which proved instrumental in evaluating risk-adjusted portfolio performance and assessing the effectiveness of decisions made by managers and analysts. The current acceleration of decision-making processes driven by artificial intelligence underscores the ongoing importance of such rigorous measurement and verification to ensure AI systems operate reliably and ethically.