Arrange the sentence in their correct order. A. This is now orthodoxy to which…

Key idea: find the noun that the pronoun "it" in the sentence "It emerged from the mathematics of chance and statistics." refers to, and then arrange sentences so pronoun references and logical flow are clear.

• Step 1: Identify the ambiguous pronoun.

• The sentence "It emerged from the mathematics of chance and statistics." can refer either to the sentence that defines the fundamental concept ("The fundamental concept: Prices are not predictable, but the mathematical laws of chance can describe their fluctuations.") or to the sentence that names the birth of modern finance ("This is how what business schools now call modern finance was born.").

• Step 2: Check which referent produces a coherent sequence and whether that sequence appears among the choices.

• Placing the sentence about modern finance before the sentence "It emerged..." makes the pronoun clearly refer to modern finance. The remaining sentences then explain the conceptual basis and implications, and conclude with the speaker's comment.

Step 3: Read the coherent ordering aloud to confirm flow and referents.

• This is how what business schools now call modern finance was born.

• It emerged from the mathematics of chance and statistics.

• The fundamental concept: Prices are not predictable, but the mathematical laws of chance can describe their fluctuations.

• Therefore the risk is measurable and manageable.

• This is now orthodoxy to which I subscribe - up to a point.

Conclusion: The sentences read coherently in the order shown above because pronoun references are resolved and each sentence logically leads to the next.