According to Tobin's Separation Property,portfolio Choice Can Be Separated into Two

question 79

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 tradeoffs
• 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 their risk aversion level; minimizing the CAL by lending at the risk-free rate

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Definitions:

Materials Requisition Slip

A document authorizing the issuance of raw materials from the storeroom to production.

Cost Per Unit

A measure of the cost incurred to produce, acquire, or create one unit of a product or service.

Stock Number

A unique identifier assigned to a particular stock of goods or securities for identification and inventory management.

Internal Control

Measures and tactics adopted by an organization to safeguard the reliability of its financial and accounting data, foster responsibility, and avert deceit.