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The separation principle states that an investor will: choose between any efficient portfolio and a riskless asset to generate the desired expected return. combine a

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The separation principle states that an investor will: choose between any efficient portfolio and a riskless asset to generate the desired expected return. combine a riskless asset with the tangency portfolio based on their risk tolerance level. never choose to invest in a riskless asset due to the low expected rate of return. choose a portfolio from the efficient set based on individual risk tolerance. combine a riskless asset with the minimum variance portfolio based on their risk tolerance level

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