Question
Which of the following are true statements (more than one possible)? A. According to Equilibrium theory and Homogeneous beliefs, a Mean-Variance Investor's Marginal Rate of
Which of the following are true statements (more than one possible)?
A. According to Equilibrium theory and Homogeneous beliefs, a Mean-Variance Investor's Marginal Rate of Substitution for optimal investment in the presence of a Capital Asset is equal to the slope of the Capital Market Line.
B. According to Equilibrium theory and Homogeneous beliefs, the Marginal Rate of Transformation faced by a Mean-Variance investor on the efficient set in the presence of a Capital Asset is equal to the slope of the Capital Market Line.
C. The Separation Principle applied to Portfolio theory allows choice of the amount invested in the risk-free asset to be made independently of an investor's appetite for risk.
D. Allowing investors to trade with one another in an economy trading purely between early and late consumption enables production decisions to be made independently of Utility.
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