Explain in detail how to derive the two fund separation theorem (mathematically and graphically).
Financial Economics Assignment
Question1: 2 pages
Explain in detail how to derive the two Fund Separation Theorem (mathematically and graphically).
Explain what happens to the efficient set of portfolios by allowing for lending/borrowing at the risk free rate.
Explain why the CAPM assumptions implies that the market portfolio is efficient.
Question2: 2 pages
Question 3: 2 pages
When might it be appropriate to extend the model to allow for multiple growth rates?
Explain the trade-off between growth and dividends.