Please answer these questions in clear and concise sentences (i.e., no mathematics are needed for this...

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Please answer these questions in clear and concise sentences (i.e., no mathematics are needed for this question). Part A: Please discuss Fisher's Separation Theorem. In doing so, please focus on i) describ- ing a firm's optimal investment level (tangency condition) in an economy with production but no exchange and ii) how adding capital markets affects optimal investment. Part B: Discuss what is meant by diminishing marginal utility. What is the implication in regard to an individual's willingness to purchase insurance (their so-called reservation price)? Part C: Discuss what is meant by a redundant asset. Part D: Discuss the concept of arbitrage in the context of a single market Would you expect to find arbitrage in a well developed market? E.g., on the NYSE. Why or why not? Please answer these questions in clear and concise sentences (i.e., no mathematics are needed for this question). Part A: Please discuss Fisher's Separation Theorem. In doing so, please focus on i) describ- ing a firm's optimal investment level (tangency condition) in an economy with production but no exchange and ii) how adding capital markets affects optimal investment. Part B: Discuss what is meant by diminishing marginal utility. What is the implication in regard to an individual's willingness to purchase insurance (their so-called reservation price)? Part C: Discuss what is meant by a redundant asset. Part D: Discuss the concept of arbitrage in the context of a single market Would you expect to find arbitrage in a well developed market? E.g., on the NYSE. Why or why not?

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A Fishers Separation Theorem states that a firms optimal investment level is independent of its capi... View the full answer