Question: ( d ) Explain Tobin's separation theorem. ( t ) Consider the following parameters: risk free rate 7 % , E ( R p )

(d) Explain Tobin's separation theorem.
(t) Consider the following parameters: risk free rate 7%,E(Rp)=15%,p=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 retum and risk of the new porfolio?
(d) Explain Tobin's separation theorem. (t) Consider the following parameters: risk

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