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According to some economists, Tobin's portfolio selection model suers from the following deciencies: (a) it explains the allocation of wealth between assets, but it does
According to some economists, Tobin's portfolio selection model suers from the
following deciencies: (a) it explains the allocation of wealth between assets, but it
does not explain the demand for money; (b) it implies that investors view
investment in long-term assets as more risky than investment in short-term assets:
this, however, is false. Discuss these shortcomings.
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