For all his insights on the portfolio choice problem, somehow Markowitz didn’t explicitly consider a bank in the system. In principle, of course, one could have solve the problem by just adding one more security in his set up. 931 more words

## Tags » Separation Theorem

#### [PGP-I FM] Foundations of the NPV Rule (Wonkish)

If you came looking for the summary of session 2 and found this post instead, stop right now and click here.

(So yes, any blog post which you see here with ‘Wonkish’ attached to the title – just like this one – can be safely skipped without any loss of continuity. 2,993 more words

#### [PGP-I FM] The Present Value Rule

In our discussion today we considered the following three cases:

*No Bank, No Investment Opportunity:*In absence of a bank, the sum of consumption in both time periods must be equal to the total available wealth. 825 more words