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Use the Fisher separation theorem to explain why the introduction of efficient market and the use of the NPV-rule will lead to increased utility for
- Use the Fisher separation theorem to explain why the introduction of efficient market and the use of the NPV-rule will lead to increased utility for all investors. (5p)
- Explain why it is important to assume zero transaction costs for the Fischer separation theorem to hold. (4p)
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The Economics of Public Issues
Authors: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
19th edition
134018974, 134018973, 9780134020532 , 978-0134018973
