According to Tobin's separation property, portfolio choice can be separated into two independent tasks consisting of __________ and ___________.
A) identifying all investor imposed constraints; identifying the set of securities that conform to the investor's constraints and offer the best risk-return tradeoffs
B) identifying the investor's degree of risk aversion; choosing securities from industry groups that are consistent with the investor's risk profile
C) identifying the optimal risky portfolio; constructing a complete portfolio from T-bills and the optimal risky portfolio based on the investor's degree of risk aversion
D) None of the above answers is correct
Answer: C
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