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Business, 14.04.2020 22:01 lchynnawalkerstudent

According to Tobin's separation property, portfolio choice can be separated into two independent tasks consisting of and . A. 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 B. identifying the investor's degree of risk aversion; choosing securities from industry groups that are consistent with the investor's risk profile C. 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 D. 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

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According to Tobin's separation property, portfolio choice can be separated into two independent tas...

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