2(a) Explain Tobin's separation theorem. (b) Consider the following parameters: risk free rate 7%, E(Rp)=15%, ,- 22. If an investor's coefficient of risk aversion A = 4 changes to A= 3, how does the optimal asset mix of risky and risk free asset change? What are the expected return and risk of the new portfolio? (c) Suppose that the borrowing rate Rr(borrowing) = 9%, is greater than the lending rate R;=7%. Show graphically how the optimal portfolio choice of some investors will be Rr affected by the higher borrowing rate. Which investors will not be affected by the borrowing rate