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. 938 more words
Tags » Separation Theorem
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 understanding of what comes later. 3,009 more words