According to Tobin's Separation Property, Portfolio Choice Can Be Separated

question 77

Multiple Choice

According to Tobin's separation property, portfolio choice can be separated into two independent tasks consisting of ________ and ________.

• A) identifying all investor imposed constraints; identifying the set of securities that conform to the investor's constraints and offer the best risk-return trade-offs
• B) identifying the investor's degree of risk aversion; choosing securities from industry groups that are consistent with the investor's risk profile
• C) identifying the optimal risky portfolio; constructing a complete portfolio from T-bills and the optimal risky portfolio based on the investor's degree of risk aversion
• D) choosing which risky assets an investor prefers according to the investor's risk-aversion level; minimizing the CAL by lending at the risk-free rate

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Definitions:

Ceremonial Messages

Communications crafted for significant occasions or ceremonies, often formal and conveying specific sentiments related to the event.

Crisis Response

The strategies and actions taken by an organization to manage and mitigate the impact of an emergency situation.

Routine Treatment

Standard procedures or methods applied consistently in similar situations or conditions, often employed in medical, technical, or administrative contexts.

Business Communications

The process of sharing information between people within and outside an organization for commercial benefit.